Question

Abby Fashions sells a suit to a customer for $600 on account. The day after the sale, the customer discovers that the jacket has a small stain on the back. Abby Fashions grants the customer a $60 credit. Abby Fashions will record:_______________

Answer 1

Answer:

The answer is: Dr sales returns and allowance $60

Explanation:

Sales returns and allowance account: refers to an account that records any discounts in the selling price when customers agree to accept defective units instead of returning them to the seller.

Since the sales returns and allowance account is an expense, they have to be debited.

Answer 2

Answer:

Debit to Sales Allowances $60

Credit to accounts receivable $60

Explanation: