Question

The return of goods by a supplier should be debited to ​

Answer 1

Answer:

Explanation: There is need to account for purchase returns as though no purchase had occurred in the first place.

Hence, the value of goods returned to the supplier must be deducted from purchases.

If purchase was initially made on credit, the payable recognized must be reversed by the amount of purchases returned. If the purchases in respect of the goods returned were made for cash, then a receivable must be recognized to acknowledge the asset resulting from the expected reimbursement to be received from the supplier in respect of the returned goods.