Best Value Furniture Uses the Periodic Inventory System to Account

Multiple Choice

Best Value Furniture uses the periodic inventory system to account for its inventory. It purchased
$2,000 of goods from its supplier but later returned $400 of the goods due to damage. Best Value would record the return by:

A) debiting Accounts Payable, crediting Purchases Purchase Returns and Allowances
B) debiting Sales Returns and Allowances, crediting Accounts Receivable
C) debiting Purchases Returns and Allowances, crediting Accounts Payable
D) debiting Accounts Payable, crediting Purchases