Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a
A) credit to Customer Refunds Payable
B) debit to Merchandise Inventory
C) credit to Merchandise Inventory
D) debit to Cash

Question

Quizplus · Accepted Answer

In a perpetual inventory system, when merchandise is returned by a customer, the inventory account is increased (debited) to reflect the addition of the returned merchandise back into inventory.

Using a Perpetual Inventory System, the Entry to Record the Return