The return of merchandise to the supplier for credit using the perpetual inventory system would include a:
A) debit to Accounts Receivable and a credit to Accounts Payable.
B) debit to Accounts Payable and a credit to Merchandise Inventory.
C) debit to Sales Returns and Allowances and a credit to Merchandise Inventory.
D) debit to Accounts Payable and a credit to Sales Returns and Allowances.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, returning merchandise to a supplier decreases the Merchandise Inventory account (since you have fewer goods) and decreases Accounts Payable (since you owe less to the supplier). Therefore, you debit Accounts Payable and credit Merchandise Inventory.

The Return of Merchandise to the Supplier for Credit Using