A purchase return of goods purchased on credit is recorded by the purchasing company as a debit to what account?
A) Accounts receivable
B) Inventory
C) Cost of goods sold
D) Accounts payable

Question

Quizplus · Accepted Answer

A purchase return means that the company is returning goods to the supplier and requesting a refund, so the purchasing company needs to decrease its accounts payable to the supplier. Therefore, a purchase return is recorded as a debit to accounts payable.

A Purchase Return of Goods Purchased on Credit Is Recorded