Recording As A SellerĪs soon as you receive the returned product. The purchase return account, on the other hand, has a credit entry for the note. In case, you – the buyers – have already paid for the purchase, the seller will provide you with the credit note, which you can utilize for adjustment in your future purchases.Īs a buyer, a person’s journal entry will reflect a debit entry for the credit memo to the supplier’s account, indicating a reduction in liability. In such a scenario, the liability of the buyer decreases as the credit gets reduced. When an individual or company purchases a product but does not find it up to the mark in terms of quality or some other factor, they immediately return it. The approach towards accounting for or recording the credit notes differ, depending on two scenarios, i.e., whether it is being maintained as a buyer or a seller.
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