A company using a perpetual inventory system that returns goods previously purchased on credit would 1. debit Accounts Payable and credit Inventory. 2. debit Accounts Payable and credit Purchases. why is it credit inventory instead of purchases? In other words I know the answer is 1 but why?

A company using a perpetual inventory system that returns goods previously purchased on credit would 1. debit Accounts Payable and credit Inventory. 2. debit Accounts Payable and credit Purchases. why is it credit inventory instead of purchases? In other words I know the answer is 1 but why?

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 1QY: Which of the following is true about the Sales Returns and Allowances account? a. It is used to...

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A company using a perpetual inventory system that returns goods previously purchased on credit would

1. debit Accounts Payable and credit Inventory.

2. debit Accounts Payable and credit Purchases.

why is it credit inventory instead of purchases? In other words I know the answer is 1 but why?

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Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
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