AOS1 KK5-Acounts Payable

Question 1

Purchase return

Answer 1

Purchase return – the return to a supplier (Account Payable) of inventory bought on credit.

Reason for returns of inventory
‐ The inventory is faulty or damaged
‐ The inventory is wrong size/colour/shape/model
‐ Too many items of inventory were purchased
‐ The business simply changed its mind about what inventory it intends to sell.

Question 2

Ethical Consideration

Answer 2

There may be occasions that it is difficult to determine when the damage may have been caused however returning inventory that was delivered in good condition, and damaged only after it was received, may reduce losses in the short term, but over time could jeopardise relationships with suppliers and damage your own brand.