Question

goods returned to pankaj , journal entry ​

Answer 1

Explanation:

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Assuming the below scenario;

Suppose “Business A” bought goods worth INR 5,000 from “Business B”, however, 1,000 worth of goods were returned by “Business A” at the time of delivery.

The goods purchased by “Business A” were intended to be used as raw material for further production of finished goods.

Purchase for INR 5000 was recorded in the books of “Business A” before the returns were realized.

(This journal entry is not applicable in case if goods are purchased by a firm for consumption and not for the production of finished goods)

___________________________________________________________________________________

(Journal entry for goods returned in the books of A)

B’s Account - 1,000 (Debit)

To Purchase Returns Account - 1,000 (Credit)

(Supporting logic for the above entry as per traditional accounting rules)

B’s Account - Personal Account - Debit the receiver

Purchase returns - Nominal Account - Credit all gains/incomes

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Answer 2

A journal entry is the record of the money transactions of a business in its financial books.

• The transactions of a business are recorded in a journal, which indicates the debit and credit balances.
• In the given situation since the goods are being returned to an individual thus, the purchases will be credited.
• The journal entry will be -

Pankaj A/c Dr.

 To purchase returns a/c

( Being goods returned to Pankaj )

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