Recording Purchase Returns on Credit Steps:

• Identify the transaction: Goods bought on credit are returned, reducing both the liability to supplier and the cost of purchases.
• Recall double-entry rule: Debit decreases assets/liabilities; credit decreases expenses.
• Debit trade payables to reduce the owed amount to the supplier.
• Credit purchases returns to reduce the original purchase expense.

Why C is correct:

• Per accrual accounting, returning credit purchases decreases the trade payable (debit) and records the return as a contra-purchase (credit to purchases returns), accurately reflecting reduced liability and cost.

Why the others are wrong:

• A: Incorrectly involves bank, which applies to cash transactions, not credit.
• B: Identical to C, but listed as a duplicate option; no distinction.
• D: Reverses entries, increasing payable and expense, which opposes the return's effect.

Final answer: C