Tyler returned $400 of merchandise within the discount period. The entry to record the return is to
A) debit Inventory for $400; credit Accounts Payable/Suppliers Name for $400.
B) debit Inventory for $400; credit Cash for $400.
C) debit to Accounts Payable/Suppliers Name for $400; credit Inventory for $400.
D) debit to Accounts Payable/Suppliers Name for $400, credit Cash for $400.

Question

Quizplus · Accepted Answer

When merchandise is returned within the discount period, it is recorded as a return of merchandise purchased on credit. Therefore, the Accounts Payable/Suppliers Name account is credited for the amount of the return, and the Inventory account is debited for the same amount. Option A and B are incorrect because they do not credit the Accounts Payable/Suppliers Name account. Option D is incorrect because it records the return as a cash transaction, which is not accurate since the original purchase was made on credit.

Tyler Returned $400 of Merchandise Within the Discount Period