Purchase returns & Allowances

Purchase return means a return of goods from the buyer to the seller for a cash refund if the purchase was for cash or, credit if the sale was made on credit.

It happens when a purchaser may be dissatisfied with the merchandise received because the goods are damaged or defective, of inferior quality, or do not meet the purchaser’s specifications.

Purchase allowance refers to a deduction made to the selling price of merchandise, granted by the seller so that the buyer will keep the merchandise.

In this situation, the purchaser may choose to keep the merchandise if the seller is willing to grant an allowance (deduction) from the purchase price.

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