Question

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting accounts receivable and debiting: a) Sales discounts. b) Sales. c) Sales returns. d) Sales allowances.

Answer 1

Answer:

sales allowances

Explanation:

Based on the information provided within the question it can be said that Gershwin would record this reduction by crediting accounts receivable and debiting sales allowances. This refers to a lower selling price when a product is defective but the consumer agrees to keep it instead of returning it. Which is what happened in this scenario after the company offered a 15% price reduction.