When recording a return of a credit sale in a perpetual inventory system, all of the following accounts are affected EXCEPT
A) Sales Returns and Allowances.
B) Accounts Receivable.
C) Merchandise Inventory.
D) Cash.

Question

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In a perpetual inventory system, when a return of a credit sale is recorded, the accounts affected typically include Sales Returns and Allowances (to record the return of goods sold on credit), Accounts Receivable (to decrease the amount owed by the customer), and Merchandise Inventory (to increase the inventory for the returned goods). Cash is not directly affected by the return transaction itself, as the transaction involves a credit sale return, not a cash transaction.

When Recording a Return of a Credit Sale in a Perpetual