Question: 3 - 7 During the year, sales returns and allowances totaled $ 9 0 , 0 0 0 . The cost of the merchandise retumed

3-7 During the year, sales returns and allowances totaled $90,000. The cost of the merchandise
retumed was $54,000. The accountant recorded all the returns and allowances by decreasing
the sales account and decreasing Cost of Merchandise Sold for $90,000.
Was the accountant's method of recording returns acceptable? Explain. In your explanation,
include the advantages of using a sales returns and allowances account.
3-7 During the year, sales returns and allowances totaled $90,000. The

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