If a Firm, Using a Perpetual Inventory System, Purchases Inventory

Multiple Choice

If a firm, using a perpetual inventory system, purchases inventory on credit, and later returns $200 of goods to the vendor, including GST, what entry would be made to record the return of goods to the vendor?

A) $200 debit to Purchases and a $200 credit to Accounts payable
B) $200 debit to Accounts payable and a $200 credit to Purchases
C) $181.82 debit to Inventory, a $18.18 debit to GST Clearing and a $200 credit to Accounts payable
D) $200 debit to Accounts payable, a $181.82 credit to Inventory and a $18.18 credit to GST Clearing