Answered: perpetual inventory method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Muscat Business Solution (MBS) follows perpetual inventory method. MBS purchase Merchandise 200 units of the HP Laser Printers at a cost of RO 120 each on credit on 10th June 2019. Terms of purchase are 5/10, n/60. MBS discovers that 50 units of HP Laser Printer returns to the supplier for a full refund on 12th June 2019. Which of the following is correct entry for Merchandise Return on 12th June 2019 in the books of MBS?

Dr. Accounts Payable RO 6,000 Cr. Purchase return RO 6,000

Dr. Merchandise inventory RO 24,000 Cr. Accounts payable RO 24,000

Dr. Accounts payable RO 6,000 Cr. Merchandise Inventory RO 6,000

Dr. Accounts payable RO 24,000 Cr. Merchandise Inventory RO 24,000

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