Q.From the following, prepare the Purchases Return Book of Kavya Traders and state the amount to be posted to the credit of the Purchases Return Account:
May 5 — Returned goods to Ramesh & Co., Debit Note No. 12, ₹1,200 (net of trade discount).
May 15 — Returned goods to Suresh Traders, Debit Note No. 13, ₹3,000 (net of trade discount).

Every return of goods originally purchased on credit is entered in the Purchases Return Book at the same net (post-trade-discount) value the original purchase carried, using the Debit Note as the source document.

Both entries are already stated net of trade discount, so they are entered as given.

Posting: the total ₹4,200 is posted to the credit of the Purchases Return Account, reducing the effective cost of purchases in the Trading Account. Individually, ₹1,200 is posted to the debit of Ramesh & Co.'s personal account (reducing what Kavya Traders owes Ramesh & Co.) and ₹3,000 to the debit of Suresh Traders' personal account.

A frequent error is posting the Purchases Return total to the DEBIT of the Purchases Return Account instead of the credit — remember it reduces Purchases (a debit-natured account), so it must itself carry a credit balance, exactly the opposite of the Purchases Account's own posting.