Howell Company granted a sales allowance of $360 to a customer who was not totally satisfied with the quality of goods received.The customer did not return the goods and had not yet paid for them.Which of the following reflects the effects of this event on the financial statements?

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Granting a sales allowance to a customer decreases assets (accounts receivable)and stockholders' equity (retained earnings).It decreases revenue and net income.It does not affect the statement of cash flows.

Howell Company Granted a Sales Allowance of $360 to a Customer