A company that returns items that were previously purchased on account will debit:Multiple ChoiceInventoryAccounts ReceivableAccounts PayableCash
Question
A company that returns items that were previously purchased on account will debit:Multiple ChoiceInventoryAccounts ReceivableAccounts PayableCash
Solution
When a company returns items that were previously purchased on account, it will debit Accounts Payable.
Here's the step by step explanation:
-
When a company purchases items on account, it means the company has received goods but has not yet paid for them. This transaction increases the company's Accounts Payable.
-
If the company later returns these items, it means the company no longer owes money for them.
-
To reflect this in the accounting records, the company will decrease (or debit) its Accounts Payable.
So, the correct answer is Accounts Payable.
Similar Questions
The entry to record a purchase allowance granted on a credit memo includes a debit to which account in the general ledger?Multiple ChoiceCashAccounts PayablePurchases Returns and AllowancesPurchases Discounts
Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on credit includes:Multiple Choicea debit to Purchases and a credit to Accounts Payable.a debit to Accounts Payable and a credit to Purchases.a debit to Purchases and a credit to Accounts Receivable.a credit to Purchases and a credit to Accounts Payable.
Which of the following accounts is credited within the journal entry to account for the receipt of an allowance for damaged merchandise?Multiple ChoiceCashAccounts PayablePurchasesPurchases Returns and Allowances
What type of account is Purchases Returns and Allowances?Multiple ChoiceContra RevenueRevenueContra ExpenseExpense
Under a perpetual inventory system, acquisition of merchandise for resale is debited to:Group of answer choicesthe Cost of Sales account.the Purchases account.the Supplies account.the Inventory account.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.