Purchase Return Entry in Tally.ERP 9

  1. 1. Purchase return journals in accounting
  2. 2. Reasons for purchase Returns
  3. 3. Debit notes in Tally.ERP 9
  4. 4. Creating a Debit Note in Tally.ERP 9

1. Purchase Return Journals in Accounting

A Return outwards Journal or purchase returns journal or purchase debit day book is a prime entry book or a daybook which is used to record purchase returns. To put it in other words, it is the journal which is used to record the goods which are returned to the suppliers. The primary document which is used as an evidence in recording transactions into purchase returns journal is the Debit note

2. Reasons for Purchase Returns

  • Damages
  • Expiration of products/ outdated
  • Different brands
  • Out of the order
  • Delays in receipts

3. Debit Notes in Tally.ERP 9

To enable the option for debit notes in Tally, follow the steps below.

Step 1 : - From Gateway of Tally, press F 11 – Shortcut for Company Features
Step 2 : - Under Accounting Features screen > Under Invoicing, set the option Use debit/ credit notes to YES.
Step 3 : -

Set the following tile to YES for:

“Use invoice mode for Debit notes”

4. Creating a Debit Note in Tally.ERP 9

LET’S UNDERSTAND THIS WITH AN EXAMPLE : M/S. ABC LTD RETURNED GOODS WORTH RS. 5000 WHICH ATTRACTED GST RATE OF SAY 5% ON 01-12-2018. TO M/S XYZ INC. HOW TO RECORD THIS TRANSACTION USING TALLY ?

Notes : - Original value of goods purchased by M/s ABC LTD on 15-11-2018 Rs. 10,000/- (Excluding GST Rate of 5%). The goods we’re returned by M/s ABC Limited owing to defect in goods.

Let us break this problem into smaller modules : - (the following in the books of ABC Ltd)

Type of return          - Purchase return. As in the given case, M/s ABC LTD is returning goods to supplier (M/s XYZ INC)
Reason for return - Damage in goods
Source document to record this transaction - Purchase return journal or Debit note
How should you prepare it in Tally ? -

Step 1 : - From Gateway of Tally, we have to follow to Accounting Vouchers screen

Step 2 : - Press CTRL + F9 on the keyboard or just select Debit note from the side table using mouse pointer.

Step 3 : - Create/getting the ledgers ready

  • Purchase return ledger – Under Purchase Accounts or having assumed that the given example is Intra state sale, then instead of creating Purchase return account and crediting the same we can use the ledger used for passing Intra state purchase as on a net it will reduce the purchases.
  • Suppliers ledger would already be created at time of purchase so it’s not required to create a new ledger at this stage
  • Tax Ledger applicable for this particular transaction would be CGST and SGST (being Intra state transaction) even this would have already been created under Duties and Taxes with required rate of GST of 5% in this case.
  • Step 4 : - Passing journal entry using Accounting Voucher Screen > Debit Note.

    • Press F2 and enter the date of transaction to 01.12.2018
    • Select Debit Note in Invoice mode
    • Give the details of original Invoice number against which the goods are being returned and also fill the date of original purchase (15-11-2018)
    • Now select the suppliers ledger ( M/s XYZ INC.)
    • Under ledger : Select the relevant Local GST purchase ledger created or select the purchase return ledger (separately created)
    • Under Item Name : provide the details of product which is returned, and in Quantity column provide the number of units returned and in Rate column feed the rate at which the quantities we’re purchased originally. ( Let’s assume in our example per unit price to be Rs. 10 there by M/s ABC LTD has returned 500 units at unit price of Rs. 10)
    • Now we have to select the tax ledger (given case to be Intra State purchase, the ledgers to be selected are CGST and SGST ledger. (In the given case CGST calculates to Rs. 250 and SGST to be Rs. 250) @ 2.5% for CGST and 2.5% for SGST.
    • Select round off ledger (if required) to round off the transaction value)
    • After you press enter, Tally will ask you to prepare E - Way bill, since the value of transaction for a Intra – State Invoice in the given case is Rs. 5500/- below the mandatory limit of Rs. 50,000/- Tally.ERP 9 will skip this field.

      [Note : - For E - Way bill to activate one have to feed the details in Statutory Features Screen (F3) under F11 Features screen and also define the value beyond which E - Way bill has to be mandatorily prepared) For Ex : This limit is set at Rs. 1,00,000/- for Intra State Transaction.]

    • Press Enter and you will end up with narration screen where we can define the reason for passing Debit note memorandum (if required)
    • Finally press enter to accept the screen and again press Enter to save the voucher.

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