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Returns Outwards Journal

Goods bought on credit from suppliers may be returned to them due to some reasons. The goods received may be of the wrong colour or type, or are faulty or damaged. A debit note is sent to the supplier giving details of the goods and stating the reason for their return. The credit note received from the supplier shows the goods returned and the amounts involved. The purchases returns book also known as returns outwards book is used to record the debit notes.

The format of the returns outwards book is about the same as the purchases day book with column headings as follow:

  • Date
  • Supplier
  • Debit Note
  • Folio (Purchases and General Ledger)
  • Amount

The debit note shows the amount of the returned goods which will be debited to the supplier’s account to reduce the amount owed.

The following is a format of a returns outwards book and how the entries are made.

Date

Particulars

D/N No

Folio

Amount

20XX
Sep 11
"     21
"     31


Sonny & Sons
Dove Coo & Co.
King and Queen Trading


0123
0124
0125


PL14
PL25
PL36


$
120
185
230




GL123

535


Posting to ledgers

  • § Each debit note amount is posted to the debit side of the respective accounts of the suppliers in the purchases ledger.
  • § At the end of the accounting period the total of the purchases returns book or returns outwards book is credited to the returns outwards account in the general ledger.

Purchases Ledger

Sonny & Sons

20XX
Sep 11


To Purchases returns

Folio
ROB11

$
120







Dove Coo & Co.

20XX
Sep 21


To Purchases Returns

Folio
ROB11

$
185








King and Queen Trading

20XX
Se 31


To Purchases

Folio
ROB11

$
230







General Ledger

Returns Outwards Account






Date
Particlars Folio $






20XX
Sep 31


Per Returns       Inwards Book for the month of Sept.



ROB11


535


Last Updated (Thursday, 21 October 2010 11:08)