Purchases Returns and Allowances

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Purchases Returns and Allowances is a contra-cost account in the ledger that records the amount of defective or unacceptable merchandise returned to suppliers and/or price reductions given for defective items.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Purchases Returns and Allowances. A contra-cost account in the ledger that records the amount of defective or unacceptable merchandise returned to suppliers and/or price reductions given for defective items.

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