A merchandiser sold merchandise inventory on account.The journal entry to record a sales allowance in the books of the merchandiser,using the perpetual inventory system would be:

Question

Quizplus · Accepted Answer

The journal entry to record a sales allowance using the perpetual inventory system is to debit the accounts receivable account and credit the sales returns and allowances account. Option B has the correct account titles and is the appropriate choice for this transaction. Option A is incorrect because it debits the sales returns and allowances account instead of the accounts receivable account. Option C is incorrect because it credits the inventory account instead of the sales returns and allowances account. Option D is incorrect because it credits the accounts payable account instead of the sales returns and allowances account.

A Merchandiser Sold Merchandise Inventory on Account