Which of the Following Is the Correct Journal Entry for a Return

question 77

Multiple Choice

Which of the following is the correct journal entry for a return of goods that were purchased on account under the periodic inventory system?

• A) \[\begin{array} { | l | l | l | }
• \hline \begin{array} { l }
• \text { Purchase Returns and } \\
• \text { Allowances }
• \end{array} &XX & \\
• \hline \text { Accounts Payable } & & XX\\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & \chi \chi & \\
• \hline \text { Merchandise Inventory } & & \chi \chi \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | l | }
• \hline \text { Accounts Payable } &XX& \\
• \hline \begin{array} { l }
• \text { Purchase Returns and } \\
• \text { Allowances }
• \end{array} & &XX \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | l | }
• \hline \text { Merchandise Inventory } & \chi \chi & \\
• \hline \text { Accounts Payable } & & \chi \chi \\
• \hline
• \end{array}\]

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Definitions:

Preferred Stock

A class of ownership in a corporation that typically provides dividend payments before dividends are issued to common stockholders, often with no voting rights.

Common Stock

A type of security that signifies ownership within a corporation, known as corporate equity ownership.

Cumulative Feature

A characteristic of preferred stock that entitles shareholders to receive dividends that were omitted in the past before any dividends can be issued to common stockholders.

Preemptive Right

A shareholder's right to maintain their proportionate ownership by buying additional shares before they are offered to the public.