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CMA Foundation · Fundamentals of Financial and Cost Accounting · Journal and Ledger

In which subsidiary book would a firm record the return of goods that it had earlier bought on credit from a supplier?

Goods returned to a supplier, after being bought on credit, are recorded in the Purchases Returns Book, also called the Returns Outward Book. The Sales Returns Book is used for goods that customers send back, while the Purchases Book holds only credit purchases.

  1. APurchases Book
  2. BSales Returns Book
  3. CPurchases Returns BookCorrect
  4. DJournal Proper

Explanation

Goods sent back to a supplier are purchase returns (returns outward), and these are recorded in the Purchases Returns Book. The Sales Returns Book is for goods returned by customers. The Purchases Book records only credit purchases of goods, not returns.

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