This document provides instructions for journalizing purchases returns and allowances. It includes an example journal entry debiting Accounts Payable and crediting Purchases Returns and Allowances for $143 for returned merchandise. It also outlines the steps for recording the journal entry, including writing the date, account titles, debit/credit amounts, and memorandum number. Finally, it reviews key terms like purchases return, purchases allowance, and debit memorandum.

1. DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCESLesson 18-4, page 475

2. GENERAL LEDGERACCOUNTS PAYABLE LEDGERSecond Round, Inc.Accounts PayableBal.820.00Purchases Returns and AllowancesJOURNALIZING PURCHASES RETURNS AND ALLOWANCESMarch 8. Returned merchandise to Second Round, Inc. $143.00, covering Purchase Invoice No. 230. Debit memorandum No. 78.Entered Debit side Credit sideAccounts AffectedAccounts PayablePurchases Returns and AllowancesChangeIncreased IncreasedClassificationLiabilityContra costnormal balancenormal balance143.00143.00(New Bal. 677.00)normal balance143.00Lesson 18-4, page 476

3. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES12345671. Write the date.2. Write the account title and vendor name in the Account Title column.3. Place a diagonal line in the Post. Ref. column. 4. Write the debit memorandum number.5. Write the debit amount.6. Write the account title.7. Write the credit amount.Lesson 18-4, page 476

4. POSTING FORM A GENERAL JOURNAL2135441. Date2. Journal Page Number3. Credit4. Account Balance5. Account NumbersLesson 18-4, page 477

5. TERMS REVIEWpurchases returnpurchases allowancedebit memorandumLesson 18-4, page 479