What Is the Entry to Record the Return of Goods

question 12

Multiple Choice

What is the entry to record the return of goods to a supplier under the perpetual inventory system, including GST?

• A) Debit inventory, credit purchases returns, credit GST outlays
• B) Debit accounts payable, credit purchases, credit GST outlays
• C) Debit inventory, debit GST outlays, credit accounts payable
• D) Debit accounts payable, credit inventory, credit GST outlays

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Definitions:

Selling Price

The amount of money customers pay for a product or service.

CVP Model Assumptions

Assumptions underlying the Cost-Volume-Profit analysis, including constant unit selling prices, variable costs per unit, and total fixed costs.

Product Mix

The variety of products a company offers to its customers, encompassing breadth, depth, and diversity of the product lines.

Linear Cost Behaviour

A cost behavior where costs change in direct proportion to changes in volume of activity.