When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit
A) Merchandise Inventory
B) Purchases Returns and Allowances
C) Accounts Payable
D) Accounts Receivable

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, when merchandise is returned to the supplier, the buyer debits Accounts Payable to decrease the liability owed to the supplier due to the return of goods.

When Merchandise Purchased on Account Is Returned Under the Perpetual