A merchandiser returned inventory worth $1,400 that was purchased on account. Under the periodic inventory system, the journal entry to record the return would include ________.

Group of answer choices

a debit to Purchase Returns and Allowances for $1,400 and a credit to Accounts Payable for $1,400

a debit to Accounts Payable for $1,400 and a $1,400 credit to Purchase Returns and Allowances

a debit to Purchases for $1,400 and a credit to Accounts Payable for $1,400

a debit to Accounts Payable for $1,400 and a credit to Purchases for $1,400

The gross profit percentage is one of the most carefully watched measures of ________.

Group of answer choices

profitability

liquidity

solvency