Questions: Multiple Choice Question What is a purchase return? A purchase return is the cash discount given for early payment of an invoice. A purchase return refers to merchandise a buyer acquires, but then returns to the seller. A purchase return refers to merchandise a seller acquires, but then returns to the buyer. A purchase return is designed to shorten the payment period between the buyer and the seller.

The answer is B: A purchase return refers to merchandise a buyer acquires, but then returns to the seller.

Explanation for each option:

A. "A purchase return is the cash discount given for early payment of an invoice."

• This is incorrect. The term for a cash discount given for early payment of an invoice is typically called a "purchase discount" or "early payment discount," not a purchase return.

B. "A purchase return refers to merchandise a buyer acquires, but then returns to the seller."

• This is correct. A purchase return occurs when a buyer returns goods to the seller, usually because the goods are defective, damaged, or not as described.

C. "A purchase return refers to merchandise a seller acquires, but then returns to the buyer."

• This is incorrect. This scenario describes a sales return, not a purchase return. A sales return happens when the seller accepts returned goods from the buyer.

D. "A purchase return is designed to shorten the payment period between the buyer and the seller."

• This is incorrect. Shortening the payment period between the buyer and the seller is typically achieved through terms of sale or payment agreements, not through purchase returns.

In summary, a purchase return specifically refers to the situation where a buyer returns merchandise to the seller.