Double Entry For Return Computer / Laptop To PC Company

When the customer (who previously purchased the computer or laptop) is not satisfied with the quality of the Computer Or Laptop Purchased, he returned it to PC company or corporation. If he purchased computer on account / credit, then the following entry is recorded from the points of view of buyer's business as shown below:

      Accounts Payable a/c  XXX

                                       Purchase Return & Allowances a/c  XXX

(Computer Returned To Company Due To Unsatisfactory Condition)

We debit accounts payable account, as now the company is no longer be the creditor of the customer and credit purchase returns and allowances equal to the amount of computer purchased.

But, if the PC is purchased for cash / bank, then the following entry is recorded as shown below:

                                             Cash a/c / Bank a/c  XXX

                                                                             Purchase Return & Allowances a/c  XXX

                                 (Computer Returned To PC Company Due To Unsatisfactory Condition)

 

Cash is increasing as computer is returned to company and the cash is giving back to customer equal to the amount of purchasing computer.