It is also called return outward.
Generally, goods are not returned but sometimes goods are returned on following conditions:
Goods are not according to orders, size, colour, weight.
Goods are damaged.
Goods are in excess of quantity
Goods are defective.
Goods purchased on trial schemes, sale-or-return basis etc.
In above circumstances the primary document is used; that is known as debit note.
Debit note is also known debit memo. It is a commercial document issued by a purchaser to a vendor.
The purchaser usually issues a debit memo for the higher amount than the invoice.
Debit notes are generally used in business-to-business transactions.
This document is used by a purchaser to inform a vendor of the quantity of goods and amount of goods being returned.
Debit note is used to return goods on credit.
Then, the supplier issues a credit note to the purchaser; it indicates that the goods have been received.
Then the purchaser will not have to pay for them.
The following conditions need to be satisfied:
The transaction must be of goods return as whole or part.
The return must be of goods-in-trade.
The supplier or vendor should not refund cash at the time of goods return.
A credit note is issued by seller to confirm the return.
The general format of Debit Note
Saraswati Pustak Pasal Itahari, Sunsari, Nepal Telephone: 025 – 543XXX Email: spp@yahoo.com Debit Note |
||||||
To, EP Publication Butwal, Rupandehi
|
Date: 10 June 2019 PAN No. 45678912 Invoice No. 154/19 Debit note No. 2/19 Order No. 125/19 |
|||||
Due to binding problem, we are returning below mentioned book. We are debiting your account.
|
||||||
DESCRIPTION |
||||||
Particulars |
Quantity |
Unit Price |
Amount Credited |
|||
Cost and Management Accounting Applied English Total Less: Trade discount (5,475@20%) |
5 10 |
595 250 |
00 00 |
2,975 2,500 |
00 00 |
|
5475 1,095 |
00 00 |
|||||
Net amount |
|
|
|
4,380 |
00 |
|
(in words: Four thousand three hundred eighty) Errors and Omissions Expected (E&OE) |
Suman Dahal For Saraswati Pustak Pasal |
|||||
Keep in Mind (KIM)
Seller, vendor and supplier are same. Purchaser and buyer are same. |
PROBLEM: 5
The following extracted information is given by PK Computer Traders:
April 10: Return to Mycrosys Computer (Debit note No. 15/19):
2 pieces mother board @ Rs 4,500 per unit
2 pieces RAM @ Rs 1,400 per unit
April 15: Return to Sky Computer (Debit note No. 16/19):
1 piece LCD monitor @ Rs 8,600 (less: trade discount @5%)
April 22: Return to Monalisa Computer (Debit note 17/19):
5 Keyboards @ Rs 300 per unit
3 pieces casing @ Rs 1,800 per unit
(Less: trade discount @8%)
Required: (a) Purchase return book; (b) Purchase return account
[Answer: Debit note = 26,318]
SOLUTION:
Purchase Return Book
Date |
Particulars |
Debit Note |
LF |
Amount |
Amount |
April 10 |
Returned to Mycrosys Computers: 2 pieces mother board @ Rs 4,500 per unit 2 pieces RAM @ Rs 1,400 per unit |
15 |
|
9,000 + 2,800 |
11,800 |
|
|
|
|
|
|
April 15 |
Returned to Sky Computer: 1 LCD monitor Less: Trade discount (8,600 @ 5%) |
16 |
|
8,600 (430) |
8,170 |
|
|
|
|
|
|
April 22 |
Returned to Monalisa Computer: 5 Keyboards @ Rs 300 per unit 3 pieces casing @ Rs 1,800 per unit Total Less: trade discount (6,900@8%) |
17 |
|
1,500 5,400 |
6,348 |
6,900 (552) |
|||||
Total debit note |
26,318 |
Debtor Account
Dr |
|
Cr |
|||||
Date |
Particulars . |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
April 22 |
To Balance c/d |
|
26,318 |
April 10 April 15 April 22
|
By Mycrosys Computer By Sky Computer By Monalisa Computer |
16 17 18 |
11,800 8,170 6,348 |
26,318 |
26,318 |
###########
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ACCOUNTING EQUATION http://tiny.cc/c89jkz
BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz
BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz
JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz
LEDGER http://tiny.cc/haakkz
SUBSIDIARY BOOK http://tiny.cc/399jkz
CASH BOOK http://tiny.cc/889jkz
TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz
BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz
DEPRECIATION http://tiny.cc/ugakkz
FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz
ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz
CAPITAL AND REVENUE http://tiny.cc/peakkz
SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz
NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz
GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz
GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz
###########
PROBLEM: 6
The following extracted information is given by Lotus Fancy House:
Feb 3: Return to Rainbow Fancy Suppliers:
10 pieces T-shirt @ Rs 450 each
5 pieces shirt @ Rs 550 each
Feb 5: Return to Dish-Home
1 satellite set-up box of Rs 3,000.
Feb 12: Return to CK Traders:
5 trousers @ Rs 350 each
3 jeans @ Rs 800 each
(Less: trade discount @ 10%)
Required: (a) Purchase return book; (b) Purchase return account; (c) CK Traders account
[Answer: Debit note = 10,985; CK Traders = 3,735]
SOLUTION:
Purchase Return Book
Date |
Particulars |
Debit Note |
LF |
Amount |
Amount |
Feb 3 |
Returned to Rainbow Fancy Suppliers: 10 T-shirt @ Rs 450 per unit 5 shirt @ Rs 550 per unit |
|
|
4,500 2,750 |
7,250 |
|
|
|
|
|
|
Feb 12 |
Returned to CK Traders: 5 trousers @ Rs 350 per unit 3 jeans @ Rs 800 per unit Total Less: trade discount (4,150 @10%) |
|
|
1,750 2,400 |
3,735 |
4,150 (415) |
|||||
Total debit note |
10,985 |
Purchase Return Account
Dr |
|
Cr |
|||||
Date |
Particulars . |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Feb 12 |
To Balance c/d |
|
10,985 |
Feb 3 Feb 12
|
By Rainbow F Suppliers By CK Traders
|
|
7,250 3,735 |
10,985 |
10,985 |
CK Traders Account
Dr |
|
Cr |
|||||
Date |
Particulars . |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Feb 12 |
To Purchase return A/c |
|
3,735 |
Feb 12
|
By Balance c/d
|
|
3,735
|
3,735 |
3,735 |
********
PROBLEMS AND ANSWERS |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු =
Basic Problem: 5 Purchase Return Book
The following extracted data is given by HM Electrical Enterprise:
March 5: Return to Usha Electrical:
5 electric heaters @ Rs 1,500 per piece
2 ceiling fans @ Rs 1,800 per piece
March 7: Return to Suraj Light Shop:
2 table fans @ Rs 2,400 per piece
12 pieces CFL @ Rs 180 per piece (Less 14% trade discount)
March 9: Furniture returned to Everest Furniture worth Rs 3,000.
Required: (a) Purchase return book; (b) Purchase return account
[Answer: (a) 17,758; (b) 17,758]
Basic Problem: 6 Purchase Return Book
Sagar Electronics has following transactions:
Jan 11: Return to CG Electronics:
3 televisions sets @ Rs 12,000 per set
2 deep freezers @ Rs 25,000 per piece
(Less 18% trade discount)
Jan 18: Return to Him Electronics:
2 music players @ Rs 3,000 per set
24 pieces CFL @ Rs 170 per unit (15% trade discount)
Jan 22: Return to Maya Fancy House:
1 Jeans pant @ Rs 1,500
Required: (a) Purchase return book; (b) CG Electronics account
[Answer: (a) 79,988; (b) 70,520]
***********
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