Assume that Waterway and Skysong uses the earnings approach for revenue recognition. Waterway returned to Skysong Inc. 5 damaged fuses. Skysong accepted the return and issued a credit note for $270. Waterway for the merchandise had purchased on account. To record this return, Skysong's accountant must debit Sales Returns and Allowances and credit Cash for $270, debit Sales and credit Cash for $270. debit Cash and credit Sales for $270. debit Sales Returns and Allowances and credit Accounts Receivable for $270