A company using a perpetual inventory system that returns goods purchased on credit would
A)debit Accounts Payable and credit Inventory.
B)debit Sales and credit Accounts Payable.
C)debit Cash and credit Accounts Payable.
D)debit Accounts Payable and credit Purchases.

Question

Quizplus · Accepted Answer

When goods purchased on credit are returned under a perpetual inventory system, the company decreases its liability (Accounts Payable) and also decreases its Inventory account, reflecting the return of goods.

A Company Using a Perpetual Inventory System That Returns Goods