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Returns Outwards

Returns outwards or purchases returns are goods bought on credit and returned to the supplier for some reason which can be that the goods are of the wrong type or specification, poor quality or damaged, etc.

The document raised is the debit note. This note states details and amount of the goods and the reason for their return, and is sent to the supplier of the returned goods. From the debit note, the supplier’s account is debited to reduce the credit balance which is the amount owed to the supplier. In return, a credit note is received from the supplier for the returned goods.

Goods returned to suppliers are not entered in the purchases journal. The purchases journal records purchases but not purchases returns. Purchases returns or returns outwards are credited to the returns outwards account. Return of goods to suppliers decreases the debit balance in the stock account, and the returns outwards account is therefore credited to effect the decrease.

For postings to ledgers, see returns outwards journal

Last Updated (Tuesday, 26 October 2010 13:26)