Question

Return outward are deducted from ________. (Fill in the blank by choosing correct option)
a) purchases
b) sales
c) capital
d) trading A/c

Answer 1

Return Outward are deducted from purchases

Answer 2

Answer:

The correct answer is A, Purchases.

Explanation:

Return Outward are deducted from Purchases. Return Outward are the Goods that are being returned by the customer to the Supplier. Goods can be returned if there is any defect in it. Consumer can return the goods within a pre-specified time by the supplier. For example if there is a company who produces stitched formal shirts for men, then if there is a defect like broken buttons, irregular length, damaged collar, non accurate measurement, etc, then consumer can return the shirt to the supplier and that would be considered as return outward, and that return outward cost would be deducted from the Purchases head of the financial statements.