On December 2, a Customer Returned Merchandise, with a Selling

Multiple Choice

On December 2, a customer returned merchandise, with a selling price of $1200 purchased on account, to a department store. Ignoring cost of goods sold, which journal entry should the department store prepare? Assume no sales discount was offered for early payment.

A) Debit Sales Revenue for $1200 and credit Accounts Receivable for $1200.
B) Debit Sales Revenue for $1200 and credit Cash for $1200.
C) Debit Sales Revenue for $1200 and credit Refund Liability for $1200.
D) Debit Refund Liability for $1200 and credit Accounts Receivable for $1200.