When a buyer returns merchandise purchased for cash, the buyer will record the transaction as a 1 debit to Merchandise Inventory and a credit to Cash 2 debit to Cash and a credit to Merchandise Inventory 3 debit to Cash and a credit to Sales 4 debit to Sales and a credit to Accounts Payable Merchandise is sold for cash. The selling price of the merchandise is $6,000 and the sale is subject to a 7% state sales tax. The journal entry to record the sale would include a 1 Credit to cash for $6,000 2 Debit to sales for $6,240 3 Credit to sales tax payable for $420 4 Debit to sales tax payable Sales for $420 If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as FOB 1 shipping point FOB 2 destination 3 FOB n/30 4 FOB buyer