Question

Entry for return of goods purchased being defective

Answer 1

Cash A/C or Bank A/C  Dr   Rs.xxx

    To Purchase Returns A/C  Rs.xxx

(being goods returned which are defective)

Answer 2

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

Purchase return A/c- real A/c , where goods goes out ,therefore its credited

Supplier A/c - person who we brought the goods, in this case supplier will receive the goods, hes the receiver therefore its debited

* note -return of defective goods is accounted as purchase return A/c

otherwise in certain situations cash  or bank A/c will be debited as if cash receiver to the company for the return of goods .

depends of the situation u need decide as per question  , if its credit sale debit the supplier , if its was a cash sales debit cash A/c.

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Journal entry

Supplier or cash or bank A/c    Dr

                   To purchases return A/c

(being defective goods returned to supplier)

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