Danton Company uses a periodic inventory system. How should Danton record the return of inventory previously purchased on account for $200?

1. Inventory 200

Accounts Payable 200

2. Accounts Payable 200

Inventory 200

3. Purchase Returns 200

Accounts Payable 200

4. Accounts Payable 200

Purchase Returns 200

A) Option 1

B) Option 2

C) Option 3

D) Option 4

Answer: D