How Would You Enter a Purchase Return of an Inventory

question 27

Multiple Choice

How would you enter a purchase return of an inventory item in the purchases journal-

• A) record a negative amount in the price column
• B) record a negative quantity in the quantity column
• C) record a negative sign in front of the item number
• D) all of the above

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Definitions:

Associate

A term that may refer to a business partner, an employee position within a company, or a relationship between entities where one has significant influence over the other.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but does not have full control over that company.

Fair Value

An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.