A Merchandiser Returned Inventory Worth $2,000 That Was Purchased on Account

question 129

Multiple Choice

A merchandiser returned inventory worth $2,000 that was purchased on account. Under the periodic inventory system, the journal entry to record such returns would include:

• A)a debit to Purchase Returns and Allowances for $2,000 and a credit to Accounts Payable for $2,000.
• B)a debit to Accounts Payable for $2,000 and a $2,000 credit to Purchase Returns and Allowances.
• C)a debit to Purchases for $2,000 and a credit to Accounts Payable for $2,000.
• D)a debit to Accounts Payable for $2,000 and a credit to Purchases for $2,000.

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Definitions:

IFRS And ASPE

International Financial Reporting Standards (IFRS) and Accounting Standards for Private Enterprises (ASPE) are sets of accounting standards for financial reporting.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Strategic Goals

Long-term, overarching objectives that an organization aims to achieve, guiding its mission and the allocation of its resources.

Investment Revenue

Income earned from various forms of investments like stocks, bonds, mutual funds, and other investment vehicles.