If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?
A) $200 debit to Purchases and a $200 credit to Accounts payable
B) $200 debit to Accounts payable and a $200 credit to Inventory
C) $200 debit to Inventory and a $200 credit to Accounts payable
D) $200 debit to Accounts payable and a $200 credit to Purchases

Question

Quizplus · Accepted Answer

In a perpetual inventory system, when inventory is returned, the Inventory account is credited to decrease it, and Accounts Payable is debited to decrease the liability.

If a Company,using a Perpetual Inventory System,purchases Inventory on Account,and