Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on the next day.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Question

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The journal entry to record the merchandise returns would be to credit (decrease) Accounts Payable by $200 and debit (decrease) Inventory by $200. Option B correctly reflects this entry.

Liberty Industries Purchased Merchandise Worth $1,800 on Credit,terms N/30 and Returned