Assume that Concord Company uses the earnings approach for revenue recognition. Concord Company sells merchandise on account for $2390 to Tamarisk Company. Tamarisk Company returns $720 (cost $400) of merchandise that was damaged, along with a cheque to settle the account. What entry does Concord Company make upon receipt of the cheque? The damaged inventory is sent to recycling.

Cash 1990

Sales Returns and Allowances 400

Accounts Receivable2390

Cash 1670

Sales Returns and Allowances 720

Accounts Receivable2390

Cash 2390

Sales Returns and Allowances720

Accounts Receivable1670

Cash 1670

Accounts Receivable1670