Question

Bacerra records purchases at invoice price and uses the perpetual inventory system. On July 5, Bacerra returned $12,000 of goods purchased on account to the seller. How would Bacerra record this transaction? Select one: A. Accounts Receivable 12,000 Inventory 12,000 B. Cash 12,000 Purchases 12,000 C. Accounts Payable 12,000 Inventory 12,000 D. Accounts Payable 12,000 Purchases 12,000

Answer 1

Answer:

C. Accounts Payable 12,000 Inventory 12,000

Explanation:

When Purchases Made using perpetual inventory system following Entry was made

Dr. Inventory                xxx

Cr. Account Payable   xxx

So, the purchase  return will be reverse entry of the above which will reduce inventory and account payable as well. The correct entry for the event is C. Accounts Payable 12,000 Inventory 12,000.