For the Year Ended December 31,2019,Davidson Mart Had Sales of $800,000

Multiple Choice

For the year ended December 31,2019,Davidson Mart had sales of $800,000 and cost of goods sold of $600,000.Davidson estimates that approximately 2% of the merchandise sold will be returned.The adjusting journal entry on December 31,2019,would include a ________.

A) debit to Cost of Goods Sold for $12,000
B) credit to Refunds Payable for $16,000
C) credit to Estimated Returns Inventory for $12,000
D) debit to Sales Revenue for $4,000