"PURCHASES RETURN" IN ACCOUNTS. BASIC ACCOUNTING TERMS.
"PURCHASES RETURN" IN ACCOUNTS. BASIC ACCOUNTING TERMS.
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00:00Hello guys, this is Sonia Setia, your accounts and egotutor.
00:04We were doing accounting terms for class 11th accounts.
00:0714 number we have purchase return or return outward.
00:11What is purchase return?
00:13Suppose we had purchased goods from Rahul.
00:16Now we are returning the goods because it was defective or we did not like its quality.
00:23So you call it purchase return or return outwards.
00:27Outward means it is going out of your business.
00:32What is journal entry?
00:34First we made Rahul a creditor because we had done credit purchases.
00:38Our liability had increased.
00:41Now because the liability is decreasing again, we are debiting Rahul.
00:45Rahul account debit to purchase return.
00:48When you purchase, you book the expense and debit the purchase.
00:53Now you are reversing the expense, so you will credit it to purchase return account.
00:58Thank you so much.