The Journal Entry to Record a Return of Merchandise Purchased

question 4

Multiple Choice

The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be

• A)Accounts Payable Purchase Returns and Allowances
• B)Purchases Returns and Allowances Accounts Payable
• C)Accounts Payable Inventory
• D)Inventory Accounts Payable

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Definitions:

Inflation Rate

The speed at which the overall price level of goods and services increases, diminishing the buying power progressively.

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the supply of money and credit in an economy.

Crop Prices

The selling price of agricultural products, which can fluctuate based on factors like supply, demand, weather conditions, and government policies.

Debts

Money owed by one party, the debtor, to a second party, the creditor; typically referencing money borrowed to be paid back with interest.