What is journal entry for these transactions.?
1. Purchased goods on credit from T rader: 450
2. Return of goods purchased on credit last month to T Robbie: 700
Ans: Dr purchase :450
Dr Trade Payables: 250
Cr Purchase return:700
Sir, Why are payables debited?
And why are payables 250 when purchases are 450
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Double Entry (BPP 4.3)
5y ago#1It is the net result of two transactions:
When goods are purchased:
DR Purchases 450
CR Payables. 450
When goods are returned:
DR Payables 700
CR Returns 700
So the net result of the entries on payables is a debit of 250 (700 - 450)
Sir, but isn't irrelevant when the supplier from which goods are bought and the supplier to which goods are returned are different?
5y ago#3The payables account shows the totalling to suppliers and it is irrelevant which supplier. It is in the payables ledger that there is an account for each separate supplier, but that is not part of the double entry.
Watch my lectures on Books of Prime Entry :-)
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