- This topic has 5 replies, 3 voices, and was last updated 10 years ago by
.
-
Posts
-
carter purchased goods from miller which were found to be faulty.
what is the double entry in carter’s accounting record to account for the return of those goods ?
a. debit:purchase returns Credit:accounts payable
b. Debit :accounts payable and Credit:purchase returnsin my head i worked it out as debit account payable as carter doesnt owe that money anymore and account payable in a liability account and decrease in liability is a debit entry.
and credit purchase returns account .
so that b
but according to the book its a.
i know its very basic but i dont know what am i missing here .
any help would be appreciated
thanksIs it perhaps because its referring to the purchase ledger control account?
it would still be the the same entry in control account or a ledger account,would nt it ?
so confused.To be honest Your original reasoning seems correct to me -the asset account should decrease with a credit entry to reflect this and the liability should decrease as. Return has been made.Is It possible the book could be wrong?Hopefully someone will be able to shed light on this subject.
It should be (b).
When goods are bought on credit, the entry is:
Dr Purchases, Cr Accounts payable.
When goods are returned, that entry has to be reversed so:
Dr Accounts payable, Cr Purchases (or Cr Purchases Returns if they keep returns separate)
- You must be logged in to reply to this topic.