A company using a perpetual inventory system that returns goods previously purchased on credit would
A)debit Accounts Payable and credit 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 goods are returned, the company debits Accounts Payable to reduce the liability and credits Inventory to reflect the decrease in inventory.

A Company Using a Perpetual Inventory System That Returns Goods