Скачать или смотреть Purchase Return and Sales Return Transaction in Debit Note and Credit Note (Theory) Day010_4

Purchase returns involve a buyer sending a Debit Note to a seller to claim a reduction in amount payable for returned goods, while sales returns involve a seller issuing a Credit Note to a buyer to acknowledge accepted returns, reducing the buyer's receivable and the seller's revenue, essentially reversing a sale. The Debit Note signals the buyer's intent to debit the seller's account (increase payable), and the Credit Note confirms the seller's action of crediting the buyer's account (decrease receivable/revenue).
Purchase Return (Buyer's Perspective)
What it is: The buyer returns goods (damaged, defective) to the seller.
Document: The buyer issues a Debit Note to the seller.
Purpose: To notify the seller of the return and request a reduction in the amount owed (outstanding payable).
Accounting:
Debit: Purchase Returns Account (reduces purchases).
Credit: Seller's Accounts Payable (reduces liability).
Sales Return (Seller's Perspective)
What it is: The seller accepts returned goods from the buyer.
Document: The seller issues a Credit Note to the buyer.
Purpose: To acknowledge the return, reduce the buyer's receivable, and decrease the seller's sales revenue.
Accounting:
Debit: Sales Returns Account (reduces revenue).
Credit: Buyer's Accounts Receivable (reduces asset).
Key Relationship
The Debit Note from the buyer triggers the need for the seller to issue a corresponding Credit Note.
The Debit Note increases the buyer's liability (payables) in their books, while the Credit Note decreases the seller's liability (receivables) in their books, effectively reconciling the transaction.