Wednesday, September 24, 2014

Purchases Return Book

This book is used to record all returns of goods by the business to the suppliers. The entries in the Purchases Returns Book are usually made on the basis of debit note issued to the suppliers or credit note received from the suppliers. We call it a debit note because the party’s (supplier) account is debited with the amount written in this note. The same note is termed as credit note from the receiving party’s point of view because he will credit the account of the party from whom he has received the note together with goods. The flow of notes is as follows.


From the following transactions of a trader let us now prepare the purchases returns day book and post it into ledger

DateAmount
January 8,2005Karim & Sons.135
" 20varun & Co.150
" 31patil Bros.250



Purchases Return Book
DateParticularsD/NL.F.Amount $
January 8,2005Karim & Sons.135
January 20varun & Co.150
January 31patil  Bros250
Total : 535

Now the individual entries are posted in their respective Ledgers as shown below:

Dr
Purchases Return Account
Cr
DateParticularsJ.FAmountDateParticularsJ.FAmount



January 31,2005By Purchases as per P.R.B535


Dr
Karim & Sons Account
Cr
DateParticularsJ.FAmountDateParticularsJ.FAmount
January 8,2005To Purchases returns135



Dr
Varun & Co's Account
Cr
DateParticularsJ.FAmountDateParticularsJ.FAmount
January 20,2005To Purchases returns150



Dr
Patil Bros Account
Cr
DateParticularsJ.FAmountDateParticularsJ.FAmount
January31,2005To Purchases returns250


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