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If you mean where to we record a receipt of a credit note from a supplier, then the entry is DR Payables CR Purchases
Trade payables: 31 January 20×2 130400
31 January 20×3 171250
Payment to suppliers 888400
Cost of goods taken from inventory
by propertier for her personal use 1000
Refunds received from suppliers 2400
Discount received 11200What is the figure for purchases included in financial statements?
In the answer double entry for cost of goods taken from inventory by propertier is Dt Drawings Ct Payables WHY?
If the answer does say Dr Drawings Cr Payables, then it is wrong!
The correct entry is Dr Drawings Cr Purchases.
The reason is that whatever the business purchased, it did not use them all because the owner took some of them. So the amount used by the business is the Purchases less the Drawings.
So…….if you write up the t-account for payables, the missing figure is Purchases and is 888400 – 130400 + 171250 – 2400 + 11200 = 938050.
However, since the owner took 1000, the final Purchases figure is 937050.
Thanks a lot.. You’re really great..the answer is correct, so there is misprint probably..yours explanations pretty good..))
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