Adams Company is a retailer and uses a perpetual inventory system.Which statement is correct?
A)Returns of merchandise by Adams Company to a manufacturer are credited to Inventory.
B)Freight paid to get merchandise to Adams Company's store is debited to Freight Expense.
C)A return of merchandise by one of Adams Company's customers is credited to Inventory.
D)Discounts taken by Adams Company's customers are credited to Inventory.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, returns of merchandise to a manufacturer are credited to Inventory to reduce the inventory balance.

Adams Company Is a Retailer and Uses a Perpetual Inventory