Question

Purchase returns should be:

• A. Added to purchases to calculate net purchases
• B. Ignored while calculating net purchases
• C. Deducted from purchases to calculate net purchases
• D. Added to sales

Answer 1

Answer:

C. Deducted from purchases to calculate net purchases

PURCHASE RETURN:

• When purchased goods are returned to the suppliers, it is known as purchase return or return outwards.

• It should be deducted from purchase to calculate Net Purchase.

• Example: Returned goods to Anju Traders Rs.500