When the material is returned to the supplier after the purchase, in that case purchase return voucher is prepared.

How to Prepare Purchase Return Voucher

Purchase return voucher has debit and credit sides. While making the purchase return voucher, the supplier’s account is debited and the purchase or purchase return is credited. In some countries like India, the tax charged on purchase is shown separately because it is compulsory to show the purchase and the sales tax amounts in the periodical sales tax returns. In this case the Supplier’s account is debited with full value of material returned (including the sales tax) and the purchase and sales tax accounts are credited with their respective values.

Points to be Kept in Mind for Preparation of Purchase Return Voucher

While preparing the purchase return voucher, the accountant must keep the following points in mind:-

  1. Purchase return must be passed by the purchase department.
  2. There should be proper debit note and delivery challan.
  3. Totals of amount of debit note must be correct.
  4. Date of debit note or the delivery challan is also very important because in some countries like India since the detail of purchase and sales tax is submitted to the sales tax authorities. If the date of document relating the material return does not match with the return period then the adjustment of sales tax on material return can not be allowed.
  5. Amount must be written both in figures and words.

The purchase return voucher must be signed by the accountant and the authorized person.

Support Documents for purchase return voucher:-

Following are the support document of purchase return vouchers:-

Delivery challan of Purchaser.

Debi note of purchaser.

Credit Note of Supplier, if any.

Transporter’s Receipt, if any.

Illustration – 1

Goods returned to M/s Morning Place, Delhi by M/s XYZ Limited – Delhi as per particulars given below:-

  • Delivery Challan No. 108 Date: 31.07.15
  • Debit Note No. 12 Date 31.07.15 for Rs.2100/= of M/s XYZ Limited.
  • Value of Goods Rs.2000/= (Local Purchase @ 5% Taxable)
  • Value of Sales Tax Rs.100/+ (Local Sales Tax @ 5%)
  • Total Value of Debit Note Rs.2100/=
  • Credit Note No. 120 dated 31.07.15 for Rs.2100/=issued by M/s Morning Place in response to the debit note of M/s XYZ Limited.
  • M/s XYZ Limited purchased this material form M/s Morning Place on 10.07.15 vide Purchase Invoice No. 101.

Prepare the necessary voucher in the books of M/s XYZ Limited.

Solution: 1 (Simple entry)

Purchase Return Voucher shall be prepared for above transaction on 31.07.15 because the returned material is being accepted by M/s Morning Place on 31.07.15 and the credit note also is being issued on 31.07.15 by M/s Morning Place. The Voucher shall be prepared as under:-

M/S XYZ LIMITED

PURCHASE RETURN VOUCHER

Voucher No. 140                                                                                     Date: 31.07.15

PARTICULARS

AMOUNT IN Rs.

Debit:  M/s Morning Place

2100/=

Total

2100/=

Credit: Purchase Return Account

2100/=

Total

2100/=

Narration: Being goods returned to M/s Morning Place against their Invoice No. 101 dated 10.07.15 vide their Credit note no. 120 dated 31.07.15 and our Debit note no. 12 dated 31.07.15 enclosed.
Amount in words: Rupees Two Thousand  One Hundred only.
Manager                                              Accountant

Illustration – 2 (To make separate entries for Purchase, Sales Tax and Cartage etc.):

We shall take the illustration No.1 for this purpose.

Now a day, in India, separate detail is kept for all types of purchases and sales tax amount thereon. Practically also, the Purchase Return Voucher should show separate details for net value of goods returned and sales tax etc. According to above transaction, it is clear that the supplier and purchaser are from same state i.e. Delhi. Therefore, this purchase shall be treated as local purchase and the Purchase Return Voucher shall be prepared as under:-

M/S XYZ LIMITED

PURCHASE RETURN VOUCHER

Voucher No. 140                                                                                      Date: 31.07.15

PARTICULARS

AMOUNT IN Rs.

Debit:  M/s Morning Place

2100/=

Total

2100/=

Credit: Local Purchase Return Account

2000/=

Credit: Local Sales Tax Account

100/=

Total

2100/=

Narration: Being goods returned to M/s Morning Place against their Invoice No. 101 dated 10.07.15 vide their Credit note no. 120 dated 31.07.15 and our Debit note no. 12 dated 31.07.15 enclosed.
Amount in words: Rupees Two Thousand  One Hundred only.
Manager                                              Accountant

Illustraion-3 (To make more detailed voucher of above transaction)

Solution: 

M/S XYZ LIMITED

PURCHASE RETURN VOUCHER

Voucher No. 140                                                                                     Date: 31.07.15

PARTICULARS

AMOUNT IN Rs.

Debit:  M/s Morning Place

2100/=

Total

2100/=

Credit: Local Purchase Return  @ 5% Taxable Account

2000/=

Credit: Local Sales Tax @ 5% Account

100/=

Total

2100/=

Narration: Being goods returned to M/s Morning Place against their Invoice No. 101 dated 10.07.15 vide their Credit note no. 120 dated 31.07.15 and our Debit note no. 12 dated 31.07.15 enclosed.
Amount in words: Rupees Two Thousand  One Hundred only.
Manager                                              Accountant

Basically, it is the systematic way to prepare the purchase return voucher because it gives the clear picture of each and every detail, to be kept for sales tax purpose. To show the percentage, is necessary to keep the separate details for each type of purchases since there may be different rates of taxes.

 RELATED TERMS: