Purchase Returns or Returns Outward Book

At times it may be necessary to return few goods back to a supplier when an order is received, this may be due to poor quality, inaccurate quantity, untimely delivery or other reasons. It is also called returns outward and an appropriate purchase returns or a returns outward book is maintained. All returns are primarily recorded in the purchase returns book unless the returns are not that frequent, in which case they are recorded in the journal.


Sample Format of Purchase Returns Book

 Date  Particulars  Debit Note No.  LF.  Details  Amount


Note: A column for “Remarks” can also be added in the purchase book which would include a brief description of the reason for why the goods were returned.


When the goods are returned, a debit note will be sent along with them and a debit note number is mentioned in the purchase returns book. In return, the supplier is expected to send a credit note. The returns outward book is totaled at the end of each month.


How to Post Entries from Purchase Returns Book into Ledger?

After the purchase returns book is properly updated and all transactions are entered into it, the total of the items is transferred to the ledger in an account called the “Purchase returns account”.

  1. At the end of the day, each entry is posted to the debit side of the appropriate individual’s account in the creditor’s ledger as this helps the account to stay up to date.
  2. At the end of the month, the total of the “Amount” column is posted to the general ledger with the help of the below mentioned journal entry.


Journal entry for purchase returns

 Creditor A/C  Debit
   To Purchase Returns A/C  Credit


Example: Let’s assume that the total purchase returns made at the end of a month are for 50,000.

  1. Returns made to A are 30,000.
  2. Returns made to B are 20,000.

These 4 different ledger accounts will be updated from the purchase returns book.


 Purchase Returns A/C

 Date  Particulars  Amt  Date  Particulars  Amt
 mm/dd  By Sundry Creditors A/C  50,000


 Sundry Creditors 

 Date  Particulars  Amt  Date  Particulars  Amt
 mm/dd  To Purchase Returns  50,000


A’s Account

 Date  Particulars  Amt  Date  Particulars  Amt
 mm/dd  To Purchase Returns  30,000


 B’s Account

 Date  Particulars  Amt  Date  Particulars  Amt
 mm/dd  To Purchase Returns  20,000


>Read Sales Returns Book