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What is the effect of a purchase return on the inventory account?
What is the effect of a purchase return on the inventory account?
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Practice Questions
1 question
Q1
What is the effect of a purchase return on the inventory account?
Increase inventory
Decrease inventory
No effect on inventory
Transfer inventory to expenses
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A purchase return decreases the inventory account as the goods are returned to the supplier.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the effect of a purchase return on the inventory account?
Solution:
A purchase return decreases the inventory account as the goods are returned to the supplier.
Steps: 4
Show Steps
Step 1: Understand what a purchase return is.
Step 2: Identify what the inventory account is.
Step 3: Recognize that returning goods means the business no longer has them.
Step 4: Conclude that this results in a decrease in the inventory account.
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