If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price this transaction is known as a sales
A) discount.
B) return.
C) contra asset.
D) allowance.

Question

Quizplus · Accepted Answer

This transaction is known as a sales allowance. A sales discount is a reduction in the selling price for early payment, a return is when the customer sends the defective merchandise back, and a contra asset refers to an account that offsets the balance of another asset account.

If a Customer Agrees to Retain Merchandise That Is Defective