In a transaction where purchased merchandise has been returned, the buyer will increase the Customer Refunds Payable account and the seller will increase the Purchases Returns and Allowances account.

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In a transaction where purchased merchandise has been returned, the buyer will increase the Purchases Returns and Allowances account, reflecting the return of goods to the seller, while the seller will increase the Customer Refunds Payable account or Sales Returns and Allowances account, indicating an obligation to refund the buyer or a reduction in sales revenue.

In a Transaction Where Purchased Merchandise Has Been Returned, the Buyer