Purchase Return Book | Subsidiary Books | Examples

What is Purchase Return:

When business purchase goods after that it found that the goods are not satisifing the need of business as per sepecific reason i.e. goods are not according to the sample, goods are defective, Difference in the quantity, delivered after long time period it means after requirements, etc. then the business will return these goods to the suppliers of the goods it is known as purchase return.

What is Purchase Return Book:

Purchase Return Book is the book in which we record the goods returned to the supplier or the vendor. it is also called "Return Outward Book", “Purchase Return Journal”  and "Purchases Returns Day Book". We need to return goods when these goods are not up to the level of sample goods sent by the supplier or defective goods received.

The process of Purchase Return: -

When goods returned by the supplier, we will issue the Debit note against these goods to the supplier. We will Debit the account of the supplier and credit the Purchase return account.

What Is Debit Note or Credit Note: -

When the buyer issues a Debit/Credit Note against Purchase Return Then it will be the Debit Note for the buyer and Credit Note for the Supplier Because of the buyer will Debit the Supplier like below:

• Journal Entry for Purchase Returns In the books of Buyer/Customer: -

DD/MM/YY  Supplier's A/c                       Dr. XXXX

                             To Purchase Return A/c                      XXXX

and Supplier will Credit the Buyer (It is Double Entry system)

• Journal Entry for Sales Returns In the books of Supplier/Vendor: -

DD/MM/YY  Sales Returns A/c,                Dr. XXXX

                             To Buyer's A/c                                      XXXX

So, Debit/Credit Note is Debit Note for the one-party and Credit Note for the other party. The Debit/Credit Note Format as shown below:

Types of Purchase Return Book:

it has two types, which are shown below:

1. Simple
2. Columnar

1. Simple:

In simple type of of Purchase return book we will not shows the details of taxes and other transportation expenses in separate column.

Example:-

From the following particulars, prepare the Purchases Return Book of a Stationary merchant M/s Pen Store -  Hoshiarpur Punjab India: 01/04/2018 The following Goods returned to M/s Ram & Sons - "Jalandhar Punjab India" because these are defective. 10 Packets of the ball pens @ Rs 20 per Packets 10 Packets of the Ink pens @ Rs 40 per Packets 04/04/2018 The following Goods returned to M/s sham & Sons - "Ludhiana Punjab India" because these are defective. 2 Ream of the A4 size paper reams @ Rs 150 per Ream 20 Pcs of the Small Note Book  @ Rs 18 per pcs 10 Pcs of the Lager Note Book  @ Rs 28 per pcs

Solution: -

First of all, we have to generate a Debit note of these goods after that we will post these transactions into the Purchase Return Book. I will show you step by step as follows: -

Now we will post it into the Purchase Return Book. *Note: - Here we are showing posting of both the transaction together but in real We have to post each transaction individually when the debit note issued to the supplier means date wise.  b Purchase Return Book ExampleIf you have any questions about this topic please ask it in the comment section below. Thanks