Connect /flow CT 1100 Help Save&Exit; Wexim Toys purchased merchandise from a su

Question

Connect /flow CT 1100 Help Save&Exit; Wexim Toys purchased merchandise from a supplier on credit, terms 2/10, n/30 for $1100. Three days later, the company returned $2,000 of the merchandise. When recording the return transaction, the company would record Multiple Choice $2,000 in the Cash Cr.column and $2,000 in the Inventory Cr.column in the cash disbursements journal $2.000 in the Accounts Payable Cr. column and $2,000 in the Inventory Dr. column of the purchases jounal Debit Accounts Payable $2.000 and credit Inventory $2.000 in the general joumal Debit Cash $ 2000 and credit Inventory $2000 in the general journal Negr? 17 of 40 C Prev

Explanation / Answer

The right answer is option (C) i.e, debit Accounts payable $ 2000 and credit inventory $ 2000 in the general Journal. We will pass the following entries for the above transactions: Date Accounts title and explanation Debit Credit Inventory 11100 Accounts Payable 11100 Being purchase of Inventory on Credit Accounts Payable 2000 Inventory 2000 Being return of Purchased Inventory We will debit Accounts payable account because we have to reduce the liability previously recoginsed for returned amount of inventory. We will credit Inventory account because it goes out. as per real account principle we have to credit What goes out. Accordingly we credited Inventory.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.