Purchase Return Book | Purchase Return Account | Debit Note

 

 

Purchase Return Book and Purchase Return Account in Subsidiary Books

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

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

 

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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

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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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