{"id":199613,"date":"2025-03-12T07:31:34","date_gmt":"2025-03-12T07:31:34","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=199613"},"modified":"2025-03-12T07:31:37","modified_gmt":"2025-03-12T07:31:37","slug":"the-journal-entry-to-record-a-return-of-merchandise-purchased-on-account-under-a-perpetual-inventory-system-would-credit","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/12\/the-journal-entry-to-record-a-return-of-merchandise-purchased-on-account-under-a-perpetual-inventory-system-would-credit\/","title":{"rendered":"The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit"},"content":{"rendered":"\n<p>The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit<\/p>\n\n\n\n<p>a.Accounts Payable.<\/p>\n\n\n\n<p>b.Purchase Returns and Allowances.<\/p>\n\n\n\n<p>c.Sales Revenue.<\/p>\n\n\n\n<p>d.Inventory.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is:<\/p>\n\n\n\n<p><strong>a. Accounts Payable.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>Under the <strong>perpetual inventory system<\/strong>, inventory records are updated continuously as transactions occur. When a company purchases inventory on account (on credit), it records the transaction by <strong>debiting Inventory<\/strong> and <strong>crediting Accounts Payable<\/strong>. If the company later returns merchandise to the supplier, it must reverse the original purchase entry to reflect the reduction in inventory and liability.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Journal Entry for Purchase on Account:<\/strong><\/h4>\n\n\n\n<p>When inventory is purchased on credit, the entry is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> Inventory (to record the asset increase)<\/li>\n\n\n\n<li><strong>Credit:<\/strong> Accounts Payable (to record the obligation to pay the supplier)<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Journal Entry for Returning Inventory:<\/strong><\/h4>\n\n\n\n<p>When merchandise is returned, the company needs to reverse the impact of the initial transaction:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> Accounts Payable (reducing the liability owed to the supplier)<\/li>\n\n\n\n<li><strong>Credit:<\/strong> Inventory (reducing the asset, as the returned goods are no longer owned)<\/li>\n<\/ul>\n\n\n\n<p>Thus, <strong>Accounts Payable is credited when the return is recorded<\/strong>, making option (a) the correct answer.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Why Not the Other Options?<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>(b) Purchase Returns and Allowances<\/strong>: This account is used under a <strong>periodic inventory system<\/strong>, not a perpetual system. The perpetual system directly adjusts inventory.<\/li>\n\n\n\n<li><strong>(c) Sales Revenue<\/strong>: Sales revenue is related to selling goods, not returning purchased inventory. It does not impact purchases.<\/li>\n\n\n\n<li><strong>(d) Inventory<\/strong>: Inventory is credited, but the question asks which account is <strong>debited<\/strong>. The correct debit account is Accounts Payable.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Conclusion:<\/strong><\/h3>\n\n\n\n<p>Under the perpetual inventory system, when returning merchandise purchased on account, the correct journal entry includes a <strong>debit to Accounts Payable<\/strong> and a <strong>credit to Inventory<\/strong> to reflect the return.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a.Accounts Payable. b.Purchase Returns and Allowances. c.Sales Revenue. d.Inventory. The correct answer and explanation is : The correct answer is: a. Accounts Payable. Explanation: Under the perpetual inventory system, inventory records are updated continuously as transactions [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-199613","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/199613","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=199613"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/199613\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=199613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=199613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=199613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}