Polk Company uses a perpetual inventory system and had the following transactions during November: November 6-Purchased $8,700 of inventory on account,terms 2/10,n/30.
November 8-Returned $1,200 of defective units and received full credit.
November 15-Paid the amount due.
What journal entry will be recorded by Polk Company on November 8?
A)Debit Inventory and credit Cost of Goods Sold for $1,200.
B)Debit Accounts Payable and credit Inventory for $1,200.
C)Debit Inventory and credit Accounts Payable for $1,200.
D)Debit Accounts Payable and credit Purchase Returns for $1,200.

Question

Quizplus · Accepted Answer

When inventory is returned using a perpetual inventory system,the Inventory account is decreased (credited)and Accounts Payable is decreased (debited).

Polk Company Uses a Perpetual Inventory System and Had the Following