Nice case 

Here I think Purchase return is main issue if this Purchase return part of this year then it should be less from purchase OR else if this purchase return is part of last year purchase then it should be less from Opening stock.

And lastly Reaming Amt. should be disclose in return.

Bhargav Ji,

Thanks for your interest.

Suppose the purchase return is part of last year, then how can we less it from opening stock. Because op. stock is on 1st april and suppose the return is made on say 30 september, then we cannot reduce it from the opening stock it also sounds little impractical.

Please suggest entries to be passed if the return of goods is part of last year.

I suppose the entry shall be

abc (creditor) a/c dr

To purchase return(under purchase group) a/c cr

In this case the net purchase becomes Rs - 2 Lakhs.

This is an unfortunate situation i would say, but nothing extraordinary. The purchases figure can be negative and the opening stock of 5 lakhs and a purchase of 1 lakh and no sales and purchase return of 3 lakh is self explanatory about the situation. It may look odd because of the negative figure in purchases. But its a possible situation.