Dogs R US uses the perpetual inventory system to account for its merchandise. On May 1, it returned $50 of merchandise due to a defect. Assuming that the purchase was originally bought on credit, demonstrate the required journal entry to record the return by selecting all of the correct actions below. (Check all that apply.) Credit Merchandise Inventory $50. Debit Accounts Payable $50. Credit Purchase Returns $50. Credit Accounts Payable $50. Debit Merchandise Inventory $50. Debit Cash $50.

Question

Business

Moriah Odonnell

31 May, 17:08

Dogs R US uses the perpetual inventory system to account for its merchandise. On May 1, it returned $50 of merchandise due to a defect. Assuming that the purchase was originally bought on credit, demonstrate the required journal entry to record the return by selecting all of the correct actions below. (Check all that apply.) Credit Merchandise Inventory $50. Debit Accounts Payable $50. Credit Purchase Returns $50. Credit Accounts Payable $50. Debit Merchandise Inventory $50. Debit Cash $50.

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Answers (1)

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Wade Logan · Answer 1

May 1, defective merchandise returned

Dr Accounts payable 50

Cr Merchandise inventory 50

Explanation:

Since accounts payable has a credit balance, when it decreases, you must credit it. While merchandise inventory has a debit balance, when it decreases, you must credit it.