Purchases, Purchase Returns and Allowances, and Purchase Discount

We tackled about purchases, purchase returns and allowances, and purchase discount and we made our first ever job sheet.

Purchases are the additional merchandise bought by the business either on a cash basis, on credit basis, on credit basis with a promissory note, with a down payment and a balance on account, or with a down payment and the balance supported by a promissory note.

When the goods received were defective, the consumer has the right to return the defective merchandise. It will be recorded as purchase returns and allowances since the business is the buyer (in this case).

Purchase discount is divided into two — Cash discount and Trade discount. Cash discount refers to a certain percentage of purchase discount granted to the buyer if he/she pays within the given period. Trade discount is the deduction of price from the list granted to the buyer. Trade discount is not recorded in the book.

Info overload!! Medyo nakakalito at nakakaloka na. Pero keri yan!

It's a relief that I still got a perfect score in our Job Sheet #1. Buti nakakaraos pa hahahaha. I hope that I will still understand the following lessons because the information gets a little confusing.