162k views
5 votes
The journal entry to return inventory when the buyer uses the periodic system to the seller would include a Select one: a. debit to accounts receivable. b. credit to purchase returns. c. debit to merchandise inventory. d. credit to purchases.

User Rmutalik
by
7.9k points

1 Answer

6 votes

Answer:

d. credit to purchases.

Step-by-step explanation:

With Periodic Method, Inventory Valuation is done at financial year end.

When Buyer Purchases Merchandise the entries will be :

Purchases (debit)

Trade Payable (credit)

When Buyer Returns Merchandise, the entries will be :

Trade Payable (debit)

Purchases Returns (credit)

Thus a Purchases Return lowers the Purchases amount, so in other words, the Purchases Account is Credited.

User Samarth Saxena
by
7.4k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.