Multiple choice

In an integrated system, rejected materials returned to the vendor would generate which of the following entries in financial accounts?

  1. Debits creditor control account and credits raw material stock account.

  2. Credits creditor control account and debits raw material stock account.

  3. Credits supplier account and debits raw material account.

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Returning materials to a vendor reverses the initial purchase; therefore, the supplier's account (creditor) is debited (reducing the liability) and the raw material stock account is credited (reducing the asset).

Keep practicing — related questions