The entry to record the return of goods to a supplier under the perpetual inventory system,including GST,is:

Question

Quizplus · Accepted Answer

In the perpetual inventory system, a return of goods to a supplier will result in a decrease in inventory, which is recorded by debiting Accounts Payable (to decrease the amount owed to the supplier) and crediting Inventory. Additionally, as GST was initially paid on the purchase, GST outlays must also be credited. Therefore, the correct entry is Debit Accounts Payable, credit Inventory, credit GST outlays. Choice D is the only option that matches this entry.

The Entry to Record the Return of Goods to a Supplier