journal entry of purchase return
Sometimes goods purchased from the party return to the party because of many reasons such as goods not in good conditions, Goods supplied not as per specification, Goods given are out o date or many such reasons under such conditions goods are returned to the party.
Under this process, a debit note is to be issued by the party to its supplier and make a journal entry of purchase return.
Example. Return goods to Suresh Rs 2000.
Accounts to be opened are Purchase Return A/c and Suresh and journal entry for the same will be .
Suresh Dr. | 2,000 |
To Purchase return A/c | 10,000 |
(being goods purchase for Cheque no 1256 |
Note : Suresh Account is debited as Suresh is personal accounts as per personal account Debit the receiver and here Suresh is the receiver.
Purchase return is credited because we take purchase return as Real Accounts Cr. What goes out and goods are going away in this entry or if we treat Purchase returns as Nominal accounts, we are reversing our expense entry of purchase here.