What Is Net Purchases In Accounting

Net Purchases in Accounting is calculated by deducting (Contra Expense Accounts) Purchases Returns, Purchases Allowances and Purchases Discounts from Gross or Total Purchases that is a Net Purchases Formula. Mathematically, we can write as shown below:

Net Purchases = Gross Purchases - (Purchases Returns + Purchases Allowances + Purchases Discounts)

Net Purchases is recorded on the Income Statement or Profit & Loss Account for the accounting period.