Under the perpetual inventory system, what is the difference between a sales return and a sales allowance?
A)A sales return reduces the amount receivable from the customer, but an allowance does not.
B)A sales return involves an adjustment to Merchandise Inventory, but a sales allowance does not.
C)A sales return requires a debit to Sales Returns and Allowances, but a sales allowance does not.
D)A sales allowance is deducted from Sales revenue to calculate net sales, but a sales return is not.

Question

Quizplus · Accepted Answer

A sales return involves the physical return of goods and requires an adjustment to Merchandise Inventory, while a sales allowance does not involve returning goods and does not affect inventory.

Under the Perpetual Inventory System, What Is the Difference Between