"PURCHASES RETURN" IN ACCOUNTS. BASIC ACCOUNTING TERMS.

Transcript

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.