On March 18, James Smith purchased $7,000.00 of furniture from Home Furnishings on account. The cost of the goods was $4,200.00. On March 20, Home Furnishings granted the customer a $900.00 sales allowance for goods damaged in transit. Which of the following represents the correct way to record this transaction?
A.
Refunds Payable 1,000
Cash 1,000
Merchandise Inventory 600
Estimated Returns Inventory 600
B.
Refunds Payable 1,000
Accounts Receivable 1,000
C.
Sales Revenue 1,000
Cash 1,000
D.
Sales Returns and Allowances 1,000
Cash 1,000
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