Recording Purchase Returns in Double-Entry Bookkeeping

Steps:

• Recognize the transaction: Goods returned to supplier reduce both the liability owed and the recorded purchases.
• Debit the supplier's account to decrease the accounts payable balance.
• Credit the purchases returns account to offset the original purchase cost.
• Form the journal entry: Debit Supplier, Credit Purchases Returns.

Why D is correct:

• It follows double-entry rules, where debits reduce liabilities (supplier account) and credits reduce expenses (purchases returns), as defined in accrual accounting principles.

Why the others are wrong:

• A: Reverses the entry by debiting purchases, which would increase costs instead of reducing them.
• B: Lists accounts in reverse order, implying credit to supplier (increasing liability) and debit to returns (incorrectly raising returns).
• C: Identical phrasing to D but potentially misordered in context; standard notation requires supplier first as debit.

Final answer: D