Michelin Jewelers Completed the Following Transactions B) C) D) $$\begin{array} { | c | r | r | } \hline \text { Sales returns and allowances } & 1,000 & \\\hline \text { Cash } & & 1,000 \\\hline\end{array}$$

question 158

Multiple Choice

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.
-Which of the following entries correctly records the sales allowance on Michelin's books?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Sales returns and allowances } & 1,000 & \\
• \hline \text { Accounts receivable } & & 1,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Sales returns and allowances } & 1,000 & \\
• \hline \text { Sales revenue } & & 1,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of goods sold } & 1,000 & \\
• \hline \text { Sales returns and allowances } & & 1,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Sales returns and allowances } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\]

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