A company using a perpetual inventory system that returns goods purchased on credit would
A)debit Accounts Payable and credit Merchandise Inventory.
B)debit Sales and credit Accounts Payable.
C)debit Cash and credit Accounts Payable.
D)debit Accounts Payable and credit Purchases.

Question

Quizplus · Accepted Answer

When a company returns goods purchased on credit and uses a perpetual inventory system, the accounts impacted will be Accounts Payable and Merchandise Inventory. Accounts Payable will be reduced by debiting it, and Merchandise Inventory will also be reduced by crediting it. Therefore, the correct option is A)debit Accounts Payable and credit Merchandise Inventory.

A Company Using a Perpetual Inventory System That Returns Goods