Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 43 - No. 48)
What impact does a purchase return have on the accounting equation?
Increases assets and increases liabilities.
Decreases assets and decreases liabilities.
Increases assets and decreases owner's equity.
Decreases assets and increases liabilities.
Explanation
A purchase return decreases inventory (an asset) and decreases accounts payable (a liability).
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