When merchandise purchased on account is returned under the perpetual inventory system the buyer would debit Merchandise Inventory?

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1179561

2026-03-07 13:26

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When merchandise purchased on account is returned under the perpetual inventory system, the buyer debits Merchandise Inventory to reflect the return of goods, effectively increasing the inventory balance. Simultaneously, the buyer would credit Accounts Payable to decrease the liability owed to the supplier. This dual entry maintains accurate records of both inventory and liabilities in real-time.

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