Knowledge Check

Indicate whether the following statements are true or false.

In a perpetual inventory system, when a customer returns merchandise the seller debits Sales Returns and Allowances.

In a periodic inventory system, Purchases is debited when merchandise is acquired.

In a perpetual inventory system, when merchandise is returned by the buyer to the seller, the buyer debits Inventory.

In a periodic inventory system, when cash is received within the discount period for a sale on account the seller credits Sales Discounts for the amount of the discount taken.