Return of Inventory to Vendor under Perpetual Inventory System

Return of Inventory to Vendor

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The following account is affected when recording a return of inventory to the vendor under a perpetual inventory system.

A. purchase returns and allowances

B. accounts receivable

C. cash

D. merchandise inventory

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A. B. C. D.

When inventory is purchased, Merchandise Inventory is debited, and credited when returned. The periodic system records purchases in an account called

Purchases and returns are booked to Purchases Returns and Allowances.

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