Purchases returns book
After
purchases of goods, the business unit may find that some of the goods are not
upto the satisfactory level because of the following reasons:
·
Goods may
be defective.
·
They
might have been damaged in transit.
·
Quantities
delivered may not agree with the invoice.
·
They
might have been received quite late (off-season).
·
They
might not be as per the samples or specifications.
·
There may
be a breach of agreement.
Therefore, the buyer may return them to the
suppliers.
Purchases returns book is a subsidiary book in
which transactions relating to return of previously purchased goods to the
suppliers, for which cash is not immediately received are recorded. Since goods
are going out to the suppliers, they are also known as returns outward and the
book is called as ‘returns outward book
or returns outward journal’. This book is prepared like purchases book and
details are entered as mentioned in the format given below:
Format
After the transactions are recorded in the
purchases returns book, posting them to ledger involves two steps:
Step 1: Posting to personal accounts of creditors: Every day, each entry in
purchases returns book is posted to the debit side of the respective personal
account of the creditor by writing the words ‘To Purchases Returns account’.
Step 2: Posting to Purchases returns account: At the end of the month,
the aggregate of the purchases returns is ascertained. It is the total purchases
returns for the month and is posted to the credit side of purchases returns
account by debiting ‘Sundry creditors account’.
A ‘debit note’ is a document, bill or statement
sent to the person to whom goods are returned. This statement informs that the
supplier’s account is debited to the extent of the value of goods returned. It
contains the description and details of goods returned, name of the party to whom
goods are returned and net value of the goods so returned with reason for
return.
Enter the following transactions in the purchases
returns book of Hari who is dealing in automobiles and post them into the
ledger.
2017
Jan. 5 Returned
to Anand 5 clutch plates @ Rs. 200
each, not in accordance with order.
Jan. 14 Returned to Chandran 4 brake shoes @ Rs. 200 each and 10 rear view mirrors @350 each, due to inferior quality.
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