The journal entry to record the goods returned by a customer include a decrease in Sales Returns and Allowances.
Option B is the correct answer.
Sales revenue is the amount that is earned by disposing of the manufactured goods to a company.
When the sold goods are returned by the debtors, then those goods are considered as a return on sales. The journal entry would be recorded by debiting the Return on sales, which means, an increase in return inward, and crediting the Accounts receivable or cash, which means, the decrease in the amount received from debtors.
Therefore, there is a fall in the sales returns at the time of returning the goods by customers to the company.
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