Question

Flynn Company uses a perpetual inventory system and had the following transactions during November:

• November 6 - Purchased $5,800 of inventory on account, terms 2/10, n/30.
• November 8 - Returned $800 of defective units and received full credit.
• November 15 - Paid the amount due.
Use the information above to answer the following question. What journal entry will be recorded by Flynn Company on November 8?
A. Debit Accounts Payable and credit Purchase Returns for $800
B. Debit Accounts Payable and credit Inventory for $800
C. Debit Inventory and credit Accounts Payable for $800
D. Debit Inventory and credit Cost of Goods Sold for $800

Answer 1

The journal entry recorded by Flynn Company on November 8 is debit Accounts Payable and credit Purchase Returns for $800.

Step-by-step explanation:

The journal entry that will be recorded by Flynn Company on November 8 is:

Debit Accounts Payable and credit Purchase Returns for $800.

When Flynn Company returns defective units to the supplier, they receive a full credit for the amount. In this case, the credit will be recorded in the Purchase Returns account, reducing the amount owed to the supplier in the Accounts Payable account.