Tom's Textiles shipped the wrong material to a customer,who refused to accept the order.Upon receipt of the material,Tom's would credit Accounts Receivable and debit:

Question

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When a customer refuses to accept an order due to the wrong material being shipped, it is considered a sales return. Therefore, Tom's Textiles would credit Accounts Receivable and debit Sales Returns. Option A is not the best choice as the revenue was never recognized since the customer did not accept the order. Option B is not appropriate as there was no discount given. Option D refers to situations where customers receive a discount or allowance due to a defect or a problem with the product but in this case, the material was simply wrong.

Tom's Textiles Shipped the Wrong Material to a Customer,who Refused