Which two accounts are affected by a purchase return?

• A. Revenue and Accounts Receivable
• B. Cash and Inventory
• C. Purchases and Accounts Payable
• D. Wages Expense and Cash

Answer: (C)

Returning goods you bought on credit reduces two things: the amount you owe to the supplier and the cost recorded for purchases. In most basic accounting setups, this shows up as debiting Accounts Payable to decrease the liability and crediting Purchases (or Purchase Returns and Allowances) to reduce the recorded purchases. This mirrors undoing part of the original purchase: you no longer owe for those items, and the total purchases recorded in the books goes down. Other options mix in revenue, receivables, or cash, which aren’t the primary effects of a purchase return.