On March 18,James Smith Purchased $5,000 of Furniture from Home $$\begin{array} { | c | r | r | } \hline \text { Sales Revenue } & 400 & \\\hline \text { Cash } & & 400 \\\hline\end{array}$$

question 134

Multiple Choice

On March 18,James Smith purchased $5,000 of furniture from Home Furnishings on account.The cost of the goods was $3,000.On March 20,Home Furnishings granted the customer a $400 sales allowance for goods damaged in transit.Which of the following represents the correct way to record this transaction?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Sales Revenue } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Refunds Payable } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline & & \\
• \hline \text { Merchandise Inventory } & 240 & \\
• \hline \begin{array} { l }
• \text { Estimated Returns } \\
• \text { Inventory }
• \end{array} & & 240 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Refunds Payable } & 400 & \\
• \hline \text { Accounts Receivable } & & 400 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | l | }
• \hline \text { Sales Returns and } & & \\
• \text { Allowances } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\]

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Definitions:

Increase

A rise or growth in quantity, size, strength, or another measure.

Conflicts

Disagreements or fights between individuals or groups arising from opposing interests or views.

Employees

Individuals who work for another person or organization in exchange for compensation.

Values

The worth or importance you attach to different factors in your life.