When Goods Previously Purchased on Account Are Returned for Credit

question 33

Multiple Choice

When goods previously purchased on account are returned for credit, the journal entry is

• A) debit Accounts Payable; credit Purchases Returns and Allowances.
• B) debit Purchases Returns and Allowances; credit Accounts Payable.
• C) debit Purchases; credit Purchases Returns and Allowances.
• D) debit Accounts Receivable; credit Purchases Returns and Allowances.
• E) debit Purchases Returns and Allowances; credit Accounts Receivable.

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Definitions:

Beer

An alcoholic drink made from yeast-fermented malt flavored with hops.

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A budget constraint represents the limits on the consumption bundles that a consumer can afford, given the consumer's income and the prices of goods.

Opportunity Set

All possible combinations of consumption and leisure that a person can achieve given their resources and prices.

Income

The money received, typically on a regular basis, for work or through investments.