The Sun Set Shade Company purchased three pieces of office equipment for a total price of P20, 100. One piece of equipment costing P800 was damaged on delivery and was returned to the vendor. The invoice has not been paid. The proper journal entry for the return under periodic inventory system is .....

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The Sun Set Shade Company purchased three pieces of office equipment for a total price of P20, 100. One piece of equipment costing P800 was damaged on delivery and was returned to the vendor. The invoice has not been paid. The proper journal entry for the return under periodic inventory system is ____

A	Accounts Payable 800Purchase Returns and Allowances 800
B	Accounts Payable 800Merchandise Inventory 800
C	Accounts Payable 800Office Equipment 800
D	Accounts Payable 800Purchases 800

Explanation:

Detailed explanation-1: -Expert-Verified Answer A purchase of Office Equipment by the company on account is considered as the purchase of Office Equipment on credit. Therefore, the Journal Entry should be the debit to office equipment account and credit to the Accounts Payable Account.

Detailed explanation-2: -Answer and Explanation: 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-3: -If the office equipment has been purchased on account, it indicates that equipment has been acquired on credit therefore, increasing the liabilities. Since equipment is an asset to be placed in the office, it is an addition to the company’s assets therefore, there is an increase in the assets.

Detailed explanation-4: -Answer and Explanation: Explanation: A purchase of supplies on account is recorded as a debit to supplies expense and a credit to accounts payable.

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