Effect of Purchase Return on Accounts and Stock in Odoo

Cybrosys Technologies
Nov 2 · 3 min read

Purchase return is the process of returning a product after purchasing it from the vendor. The product is returned for several reasons such as damages in the product, on account of less space in the warehouse and so forth.

This returning of products, however, affects the accounts and stock in a specific manner.

In this blog, am explaining how does the purchase return affects the accounts and stock.

Odoo handles the return of products in an easy manner. Return of products affects the accounts based on the mode of accounting i.e.Continental and Anglo-Saxon.

Effect of Purchase Return on Accounts (in Anglo-Saxon)

First of all, CREATE and CONFIRM a purchase order.

In this order, we purchased 10 products.

Then validate the delivery.

Upon validating delivery, the stock in hand will be changed(here the stock becomes 10 units). Initially, the stock in hand was 0, now it has changed to 10 units.

Upon validating the delivery, 2 journal entries will be created.

We can see the entries under the accounting module via going to Accounting -> Journal entries.

Stock Input Account (Goods received not purchased) is credited and Stock Valuation Account(Inventories) is debited. These two amounts are based on the cost of a unit product.

Upon validating the bill, two more entries will be created, ie account payable (Creditors) is credited and Stock Input Account (Goods received not purchased) is debited.

After registering the payment, the journal entries will be like below:

account payable(Creditors) is debited and the bank account is credited.

Returning of purchased product

To return the purchased product, click on the RETURN option present in the delivery receipt.

Next, enter the quantity of products that are to be returned to the vendor.

Validate the return.

After validating the RETURN, the journal entries are created.

ie, the stock valuation account (Inventories) is debited and the stock input account (goods received not purchased)is credited. The amount is based on the cost of the product.

Continue Reading…


cybrosys

Cybrosys Technologies

Written by

We are Odoo Ready Partners standing par excellence in Odoo implementation, customization and allied services.

cybrosys

cybrosys

We are Odoo Ready Partners standing par excellence in Odoo implementation, customization and allied services. We do Source code sale, Custom software development, and Employee outsourcing.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade