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What will be the Journal Entry when goods purchased are returned?
- a)Creditors A/c Dr. To Purchase Returns A/c
- b)Purchase Return A/c Dr. To Creditors A/c
- c)Creditors A/c Dr. To Sales A/c
- d)None of these.
Correct answer is option 'A'. Can you explain this answer?
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What will be the Journal Entry when goods purchased are returned?a)Cre...
Journal Entry for Goods Purchased Returned
When goods purchased are returned, the appropriate journal entry would be:
Creditors A/c Dr. To Purchase Returns A/c
Explanation:
The above journal entry records the return of goods to the supplier or creditor. The account that is credited is Purchase Returns A/c, which is a contra account of Purchase A/c and reduces the value of purchases. The account that is debited is Creditors A/c, which is a personal account and represents the amount owed to the supplier for purchases made on credit.
Below are the details of the accounts involved in the journal entry:
Creditors A/c:
- It is a personal account
- Represents the amount owed to the supplier
- Debited when purchases are made on credit
Purchase Returns A/c:
- It is a nominal account
- Represents the returns of goods purchased
- Contra account of Purchase A/c
- Credited when goods are returned
In conclusion, when goods purchased are returned, the above journal entry should be recorded to accurately reflect the transaction in the accounting records.
When goods purchased are returned, the appropriate journal entry would be:
Creditors A/c Dr. To Purchase Returns A/c
Explanation:
The above journal entry records the return of goods to the supplier or creditor. The account that is credited is Purchase Returns A/c, which is a contra account of Purchase A/c and reduces the value of purchases. The account that is debited is Creditors A/c, which is a personal account and represents the amount owed to the supplier for purchases made on credit.
Below are the details of the accounts involved in the journal entry:
Creditors A/c:
- It is a personal account
- Represents the amount owed to the supplier
- Debited when purchases are made on credit
Purchase Returns A/c:
- It is a nominal account
- Represents the returns of goods purchased
- Contra account of Purchase A/c
- Credited when goods are returned
In conclusion, when goods purchased are returned, the above journal entry should be recorded to accurately reflect the transaction in the accounting records.
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Community Answer
What will be the Journal Entry when goods purchased are returned?a)Cre...
Creditor as a liability decrease so debited, purchase means goods are return back so it is credited.
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