Accounting for IGCSE & O level - Accounting Procedures (Section 22 - No. 6)
In the purchases ledger, what accounting entry is recorded when a business returns faulty goods to a supplier?
Debit supplier's account and credit purchases returns
Credit supplier's account and debit purchases returns
Debit purchase returns and credit supplier's account
Credit purchase returns and debit supplier's account
Explanation
Returning faulty goods means less is owed to the supplier. Debit purchase returns, credit supplier account.
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