Question

Purchases returns book is used to record ___________.

• A. returns of goods purchased for cash
• B. return of fixed assets purchased on credit
• C. returns of goods purchased on credit
• D. None of above

Answer 1

Answer: (C)

returns of goods purchased on credit

Return of goods, purchased on credit is recorded under Purchase Return Book or return outward book. Purchase book shows a debit balance, so purchase return book will show credit balance. While returning the goods buyer sent a "debit note" to the seller. The debit note contains the quantity of returned goods and reason of returning goods.