‘Tis the season for purchase returns … all year long. Because if you sell products at your business, you know that not all customers are satisfied. If a customer wants to bring back an item, you need to make sales returns and allowances journal entries.
Returns are a normal part of running a business. But if you don’t know how to account for a return with a purchase returns and allowances journal entry, your books will be inaccurate.
Not quite sure how to do it? That’s where your friends at Patriot come in. We’ll walk you through the process—step by step.
A purchase return, or sales return, is when a customer brings back a product they bought from a business, either for a refund or exchange. No matter how great your products are, you’re bound to have purchase returns at some point or another.
A customer might return an item for several reasons. Maybe the customer:
- Bought more than they needed
- Bought the wrong product
- Found a better-priced good elsewhere
- Received the wrong good
- Received a damaged good
