Select all that apply
X-Mart uses the perpetual inventory system to account for its merchandise. A customer who purchased merchandise on account requested an allowance on a merchandise purchase due to its poor quality, but he did not return the goods back to X-Mart. Assuming that X-mart gives an allowance of $50 on the merchandise, demonstrate the required journal entry on X-Mart's books to record the allowance by selecting all of the correct actions below. (Check all that apply.)
Multiple select question.
1. Debit Merchandise Inventory $50.
2. Credit Merchandise Inventory $50.
3. Credit Sales Returns and Allowances $50.
4. Debit Sales Returns and Allowances $50.
5. Credit Cost of Goods Sold $50.
6. Debit Cost of Goods Sold $50.
7. Credit Accounts Receivable $50.
8. Credit Cash $50.