C. Fong returned $200 of merchandise within the discount period. The entry to record the return is
A) debit to Inventory for $200, credit Accounts Payable for $200.
B) debit to Inventory for $200, credit Cost of Goods Sold for $200.
C) debit to Accounts Payable for $200, credit Inventory for $200.
D) debit to Accounts Payable for $200, credit Cash for $200.

Question

Quizplus · Accepted Answer

When merchandise is returned within the discount period, the company reduces its liability (Accounts Payable) because it owes less to the supplier. At the same time, it decreases its Inventory account to reflect the return of goods.

C Fong Returned $200 of Merchandise Within the Discount Period