MANAGEMENT

Detailed explanation-1: -Using a perpetual inventory system, the buyer’s journal entry to record the return of merchandise purchased on account includes a d) credit to inventory. The purchase of the inventory under the perpetual inventory system means that inventory was debited and accounts payable was credited.

Detailed explanation-2: -Under the perpetual inventory system, the return of merchandise sold will put the returned merchandise back into the inventory account. Since the merchandise was sold on account, the accounts receivable will decrease because the customer will have a lesser or no amount to pay.

Detailed explanation-3: -Under the perpetual system, purchases, purchase returns and allowances, purchase discounts, sales, and sales returns are immediately recognized in the inventory account, so the inventory account balance should always remain accurate, assuming there is no theft, spoilage, or other losses.

Detailed explanation-4: -The correct answer is B. debit accounts payable and credit inventory. If the company had returned merchandise to the supplier, its inventory and accounts payable would decrease because of the returned goods. The entry would be a debit to accounts payable and a credit to Inventory.