Mary operates a wholesale business that distributes high quality doll houses. One day,her best customer called to say they had over-ordered and would like to return $500 worth of product that was billed on account. To maintain good relations with this customer, Mary graciously accepted the return. The cost of the product is $300. Which of the following entries by Mary correctly records the sales return? Assume Mary uses the perpetual inventory system.

Select one:

a. DrSales Returns and Allowances$500, Cr Accounts Receivable $500 and DrInventory $300, Cr Cost of Goods Sold $300

b. DrSales Returns and Allowances $500, Cr Accounts Receivable $500

c. Dr Sales Returns and Allowances $300, Cr Cost of Goods Sold $300 and Dr Inventory $500, Cr Accounts Receivable $300

d. Cr Sales $500, DrAccounts Receivable $500 and Cr Inventory $300, DrCost of Goods Sold $300