B-Mart sells $5,000 of blue jeans. The customer later tells B-Mart that $200 of them are defective. The sale of the $5,000 of blue jeans on account has already been recorded. The customer agrees to keep the blue jeans and B-Mart agrees to a $200 allowance. Assuming a perpetual inventory system is used, B-Mart will:
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debit Inventory for $200 and credit Accounts receivable for $200. |
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debit Accounts receivable for $200 and credit Sales Returns & Allowances for $200. |
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debit Sales Returns & Allowances for $200 and credit Accounts Receivable for $200. |
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debit Accounts receivable for $200 and credit Inventory for $200. |