Here's a breakdown:
* Returns notes: These are documents issued by the buyer to the supplier when goods are returned. They detail the goods returned, the reason for return, and the quantity returned.
* Credit notes: These are documents issued by the supplier to the buyer when goods are returned. They acknowledge the return and credit the buyer's account for the value of the returned goods.
The process typically looks like this:
1. Goods are returned: The buyer returns goods to the supplier.
2. Returns note is issued: The buyer issues a returns note to the supplier, detailing the returned goods.
3. Supplier receives goods: The supplier receives the returned goods and checks them against the returns note.
4. Credit note is issued: The supplier issues a credit note to the buyer, acknowledging the return and crediting the buyer's account.
5. Purchases Returns Day Book is updated: The credit note is used to update the Purchases Returns Day Book, recording the details of the returned goods.
In summary, the Purchases Returns Day Book is essentially a record of the credit notes issued by suppliers for returned goods.