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CA Foundation · Accounting · Accounting Process

Which of the following transactions is recorded in the Purchases Returns Book (Returns Outward Book)?

Goods returned by the firm to a supplier from whom they were bought on credit are recorded in the Purchases Returns Book. Customer returns go to the Sales Returns Book, asset returns go to the Journal Proper, and cash transactions go to the Cash Book.

  1. AGoods returned by a customer to the firm
  2. BGoods returned by the firm to a supplier from whom they were bought on creditCorrect
  3. COld furniture returned to a supplier of furniture bought on credit
  4. DCash purchases returned to a supplier

Explanation

The Purchases Returns Book records goods of the trading type returned to suppliers to whom the firm owes money on credit purchases. Customer returns go to the Sales Returns Book. Furniture is not stock-in-trade, so its return is recorded in the Journal Proper. Cash purchase returns are recorded in the Cash Book.

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