Jones co. returned merchandise purchased from smith co. the journal entry to record the return of the merchandise by jones under a perpetual inventory system is a debit to and a credit to
a. accounts payable—smith co.; merchandise inventory
b. accounts receivable— smith co.; merchandise inventory
c. sales returns and allowances; merchandise inventory
d. none of these choices are correct.

a. Accounts Payable—Smith Co.; Merchandise Inventory

Explanation:

We assume that Jones Co. purchased merchandise on account.

In order to record the purchase returns we do the following,

Smith Co, debit, since this is a payable account and credit by nature, we debit it to reduce the balance payable amount by the amount of inventory returned.

We also credit out merchandise inventory, since it is reduced and no longer has the returns accumulated.

Option A is the right answer.

Hope that helps.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know