Monday, May 28, 2012

Purchase Returns Journal Entry

Generally, purchase returns are goods returned to suppliers because of various reasons. For example, there might be wrong products sent, the products are damaged while being shipped, or the purchaser is simply not satisfied with the purchase.

This is also known as returns outwards. The double entry journal entry for goods which have been to suppliers is : 

Debit the returns outward accounting account in the general ledger to increase its value
Credit to the purchases account to decrease its value.

The purchase return account its a temporary account that accountants close  o Purchase accounts, it will directly affect the purchase account and income statement.


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