Asked by Brooke Ramsey on Jul 22, 2024
Verified
The return of merchandise to the supplier for credit using the perpetual inventory system would include a:
A) debit to Accounts Receivable and a credit to Accounts Payable.
B) debit to Accounts Payable and a credit to Merchandise Inventory.
C) debit to Sales Returns and Allowances and a credit to Merchandise Inventory.
D) debit to Accounts Payable and a credit to Sales Returns and Allowances.
Perpetual Inventory System
An inventory system that records changes in inventory levels after every transaction, ensuring continuous, real-time updates.
Accounts Payable
A liability account that records amounts owed by a company to suppliers or creditors for purchases made on credit.
Merchandise Inventory
Represents the goods a company intends to sell to customers that are purchased and stored, evaluated as a current asset on the balance sheet.
- Master the entry of transactions within the framework of a perpetual inventory system.
- Understand how discounts, returns, and allowances are recorded and their impact on accounting.
Verified Answer
Learning Objectives
- Master the entry of transactions within the framework of a perpetual inventory system.
- Understand how discounts, returns, and allowances are recorded and their impact on accounting.
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