Journal Entry for Cash Purchase Return

Journal Entry for Cash Purchase Return

Journal entry for cash purchase return shall be recorded by debiting the cash and crediting the purchase return. The purchase return is credit being a decrease in purchase expense, while cash is debited being increase in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Cash		xxx
01-01-2017	Purchase Return			xxx

The above transactions may also be recorded by crediting the purchase account and debiting the cash account.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Cash		xxx
01-01-2017	Purchase			xxx

 

Example Journal Entry for Cash Purchase Return

Cash purchases amounting 185,000 were made from Islam, the purchased items were returned to Islam for some technical fault in the items. The following journal entry was recorded for cash purchases

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Purchase		xxx
01-01-2017	Cash			xxx

The following entry shall be recorded by for cash purchase return. The cash account shall be debited assuming that cash has been received back and purchase return account shall be credited.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Cash		xxx
01-01-2017	Purchase Return			xxx

In case cash has not received for purchase return, then entry shall be recorded by debiting the Islam being receivable and crediting the purchase returns.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Islam		xxx
01-01-2017	Purchase Return			xxx