Which of the following is the correct journal entry for purchase returns of goods purchased on account under the periodic inventory system?
A) $\begin{array}{c}
\begin{array}{|l|}
\hline \text {Purchase Returns and Allowances}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\
\hline \text {Accounts Payable }\
\hline
\end{array}
\end{array}$
B) $\begin{array}{c}
\begin{array}{|l|}
\hline \text {Accounts Payable}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\
\hline \text {Merchandise Inventory }\
\hline
\end{array}
\end{array}$
C) $\begin{array}{c}
\begin{array}{|l|}
\hline \text {Accounts Payable}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\
\hline \text {Purchase Returns and Allowances }\
\hline
\end{array}
\end{array}$
D) $\begin{array}{c}
\begin{array}{|l|}
\hline \text {Merchandise Inventory}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\
\hline \text {Accounts Payable }\
\hline
\end{array}
\end{array}$

Question

Quizplus · Accepted Answer

The correct journal entry for purchase returns of goods purchased on account under the periodic inventory system is to credit Accounts Payable (to decrease the amount owed) and debit Purchase Returns and Allowances (to decrease Merchandise Inventory for the returned goods). Choice C shows the correct accounts debited and credited.

Which of the Following Is the Correct Journal Entry for Purchase