Racer, Inc. purchased $10,000 of furniture from Furniture Warehouse on account. The cost of the goods was $5,000. Four days later, Furniture Warehouse granted Racer a $3,000 allowance for goods damaged in transit. How would the allowance be recorded by Furniture Warehouse? Group of answer choices debit 

Cost of Goods Sold $5,000; credit Accounts Receivable $5,000 

debit Sales Returns and Allowances $3,000; credit Accounts Receivable $3,000 

debit Accounts Receivable $5,000; credit Sales Returns and Allowances $5,000 

debit Sales Returns and Allowances $3,000; credit Merchandise Inventory $3,000

 

Answer rating: 100% (QA)

The correct answer is b debit Sales Returns and Allo... View the full answer