If a purchaser returns goods purchased on account to the supplier under a perpetual inventory system, the purchaser would debit:
A)Inventory and credit Accounts Payable.
B)Accounts Payable and credit Inventory.
C)Inventory and credit Accounts Receivable.
D)Accounts Receivable and credit Inventory.

Question

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Under a perpetual inventory system, when a purchaser returns goods previously purchased on account, the purchaser would debit Accounts Payable (to decrease the liability owed to the supplier) and credit Inventory (to decrease the inventory asset account), reflecting the return of goods.

If a Purchaser Returns Goods Purchased on Account to the Supplier