Purchase Returns

Code: 5114
👁 Views: 202

Account Information

Financial Statement Income Statement
Normal Balance Credit

Definition

Value of goods returned to suppliers due to defects or errors

Common Journal Entries

Return defective goods to supplier

Dr. Accounts Payable
Cr. Purchase Returns

Receive credit note from supplier

Dr. Accounts Payable
Cr. Supplier Returns

Receive cash refund after return

Dr. Cash in Hand
Cr. Supplier Returns

Return due to invoice error

Dr. Accounts Payable
Cr. Supplier Returns

Return defective goods to supplier

Dr. Accounts Payable
Cr. Purchase Returns

Receive credit note from supplier

Dr. Accounts Payable
Cr. Supplier Returns

Receive cash refund after return

Dr. Cash in Hand
Cr. Supplier Returns

Return due to invoice error

Dr. Accounts Payable
Cr. Supplier Returns

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 2 Inventories
US GAAP ASC 330 Inventory

❓ Frequently Asked Questions

Q: How are purchase returns recorded?

A: Dr. Accounts Payable, Cr. Purchase Returns (contra-purchase), and Cr. Input VAT (if applicable).