Using a Perpetual Inventory System, the Entry to Record the Return

question 183

Multiple Choice

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

• A) credit to Sales Returns and Allowances
• B) debit to Merchandise Inventory
• C) credit to Merchandise Inventory
• D) debit to Cost of Merchandise Sold

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Definitions:

Annual Pension Benefit

The amount of money an individual receives annually from their retirement plan after retiring.

Variable Component

A cost or expense that changes in proportion to changes in a business’s activity level.

Payroll System

A system used by companies to organize, calculate, and process payments to employees for their services.

Payroll Tax Expense

Payroll Tax Expense represents the taxes that an employer is liable to pay based on the wages and salaries of employees, including social security, Medicare, and unemployment taxes.