Purchases Returns Book is used to record ........

Accountancy (Phase -I & II) Fund flow statement

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Purchases Returns Book is used to record:

Returns of goods purchased on credit.

Returns of goods purchased for cash

Returns of Non-current assets purchased on credit

Returns of Non-current assets purchased for cash

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Explanation:

There is need to account for purchase returns as though no purchase had occurred in the first place. Hence, the value of goods returned to the supplier must be deducted from purchases. If purchase was initially made on credit, the payable recognized must be reversed by the amount of purchases returned.