Journal entry for transfer of Purchase return is -
Purchase return A/c Dr.
To Trading A/c

True

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False

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Solution

The correct option is A True
Purchase return is the amount of goods returned by firm while purchase of goods. Trading account is divided into two sides, credit and debit side. Debit side records items related to purchase and credit side records items related to sale. As purchase return is related to purchase and thus has to be debited. Purchase return is subtracted from purchases in trading account.
Hence, given journal entry to transfer purchase return is correct.

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Pass necessary Journal entries' to rectify the following errors:

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(iv) Goods worth Rs 1,160 returned to Karishma, were recorded in Purchase Book as Rs 1,106.

The correct journal entry for return of goods purchased from Mr. John on credit is:

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