A buyer using a perpetual inventory system uses an account named Purchases Returns and Allowances to record any goods returns to a supplier.

Name: A buyer using a perpetual inventory system uses an account named Purchases Returns and Allowances to record any goods returns to a supplier.
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Question

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In a perpetual inventory system, returns to a supplier are recorded by crediting the Inventory account directly, not through a Purchases Returns and Allowances account, which is used in a periodic inventory system.

A Buyer Using a Perpetual Inventory System Uses an Account