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| Purchase Return Journal Entry |
When a company returns the purchased goods to a supplier, then it is necessary to record the purchase returns in the accounting records.
Journal Entry for Purchase Return
Accounts Payable or Creditor Account Debit
Purchase Returns or Purchase Account Credit
- The "Accounts Payable" account is credited because of reduce the amount owed to the supplier.
- The "Purchase Returns" account is debited because of recognizing the reduction in the company's purchases.
This above journal entry represents the decrease the accounts payable (liability) due to the returned goods to the supplier and the reduction in the company's purchases.
