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:

U.S. Dollar

The currency of the United States, widely used worldwide as a standard for financial transactions.

Merchandise Valued

The total worth of goods held by a company for the purpose of resale.

British Pound

The currency of the United Kingdom, represented by the symbol £ and widely used in Britain and its territories.

U.S. Currency

Money issued by the United States, including banknotes and coins.