Accounting for IGCSE & O level - Accounting Procedures (Section 17 - No. 29)
In the purchases ledger, what accounting entry is recorded when a business receives a credit note from a supplier for returned goods?
Debit the supplier's account and credit purchase returns.
Credit the supplier's account and debit purchase returns.
Debit the purchase returns account and credit the supplier account.
Credit the purchases returns account and debit the supplier account.
Explanation
A credit note reduces the amount owed, so we debit the supplier's account.
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