Question

Kamala returned defective goods for 500 gross.​

Answer 1

Explanation:

Some goods purchased by Kamala is returned to the suppliers. This is accounting for purchase returns .

On the receipt of the goods the following entry would have been passed.

If the supplier has granted credit period and the goods were returned before the end of such credit period the supplier would be still outstanding.

Then the journal entry would be :-

Supplier. Dr

Purchase Returns Cr

This will make the supplier balance zero.

If the supplier has been already settled:-

When the above mentioned journal entry is passed the supplier balance would become debit. If he is a regular supplier this debit balance would set off against the credit balance in respect other supplies by the same supplier.

If this is an one-off transaction he could be shown as a debtor.