If the perpetual inventory system is used to record the purchase and sale of goods, the account used to record the return of merchandise is the:
A)merchandise inventory account
B)purchases account
C)purchase returns and allowances account
D)transportation in account

Question

Quizplus · Accepted Answer

The perpetual inventory system continuously updates inventory records, including returns. Thus, returns are recorded in the merchandise inventory account, decreasing the inventory value.

If the Perpetual Inventory System Is Used to Record the Purchase