Lavinia Company records purchases at invoice price, using the periodic inventory system. On July 5, Lavinia returned $24,000 of goods purchased on account to the seller.
How would Lavinia record this transfer?
A) Accounts Payable 24,000
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ Purchases Returns and Allowances 24,000
B) Accounts Receivable 24,000
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ Purchases Returns and Allowances 24,000
C) Accounts Payable 24,000
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ Purchases 24,000
D) Cash 24,000
$\quad $ $\quad $ $\quad $ $\quad $ Purchases Returns and Allowances 24,000

Question

Quizplus · Accepted Answer

When goods are returned to a supplier, the company decreases its Accounts Payable (since it owes less to the supplier) and records the return in the Purchases Returns and Allowances account to decrease the total purchases amount.

Lavinia Company Records Purchases at Invoice Price, Using the Periodic \quad

Lavinia Company Records Purchases at Invoice Price, Using the Periodic $\quad$