The correct answer is:
|
Dr Purchases |
$450 |
|
|
Dr Trade Payables |
$250 |
|
|
Cr Purchase Returns |
|
$700 |
The purchase of goods on credit is recorded as Dr Purchases, Cr Trade payables $450. The return of goods which were purchased on credit is recorded as Dr Trade Payables, Cr Purchase Returns, combining both entries gives the answer above.
