Purchases Returns and Allowances
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.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
