Question

A Purchases returns of Rs 200 to Mr P , if entered in the sales book would affect ___________.

• A. P's Account
• B. Purchases Returns Account
• C. Sales Account
• D. Purchases Returns Account and Sales Account

Answer 1

The correct option is D Purchases Returns Account and Sales Account

Purchase returns need to be recorded in purchase return day book. If this has been recorded in sales book, it unnecessarily affects the sales account. In order to rectify the mistake the effect to sales account is to be reversed and the correct effect to purchase return account is to be given. Therefore, it will affect the purchases return account and the sales account.