38) ABC Company sold merchandise inventory on account to Baxter Enterprises. ABC Company grants a $200 sales allowance for damaged goods to Baxter. The journal entry to record a sales allowance in the books of ABC Company, using the perpetual inventory system and assuming an adjusting entry was made to record estimated returns would be:

A)

Sales Revenue	200
Merchandise Inventory		200

B)

Refunds Payable	200
Accounts Receivable		200

C)

Cost of Goods Sold	200
Sales Revenue		200

D)

Estimated Returns Inventory	200
Accounts Receivable		200