The Return of Merchandise to the Supplier for Credit Using

question 113

Multiple Choice

The return of merchandise to the supplier for credit using the perpetual inventory system would include a:

• A)debit to Accounts Receivable and a credit to Accounts Payable.
• B)debit to Accounts Payable and a credit to Merchandise Inventory.
• C)debit to Merchandise Inventory and a credit to Accounts Payable.
• D)debit to Accounts Payable and a credit to Purchases Returns and Allowances.

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Definitions:

Growth In Assets

An increase in a company's or individual's asset base over a specific period.

Current Liabilities

Obligations of a company due within one year, including accounts payable, short-term loans, and other similar debts.

Percentage Of Sales Method

An accounting technique used to forecast the future financial positions based on a set percentage of sales.

External Funds

Capital that comes from outside of a company, including debt financing and equity financing from external investors.