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

C. Accounts Payable 12,000 Inventory 12,000

Step-by-step 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.