The seller's entry to record a purchase return under a perpetual inventory system includes a debit to Inventory and credit to Purchase Returns and Allowances.

Name: The seller's entry to record a purchase return under a perpetual inventory system includes a debit to Inventory and credit to Purchase Returns and Allowances.
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Question

Quizplus · Accepted Answer

In a perpetual inventory system, the seller records a purchase return by debiting Sales Returns and Allowances and crediting Accounts Receivable or Cash, not Inventory.

The Seller's Entry to Record a Purchase Return Under a Perpetual