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The accounting principle required the entity to record all of those transactions as liabilities. The balance in this list is compared with the balance in the general ledger accounts payable account. This procedure helps to verify that all the postings have been made correctly. When merchandise is returned to suppliers or a price adjustment (allowance) is requested, the buyer usually contacts the supplier in writing. Journal Entries for Purchase Discount: In this example, all the items are assumed to be inventory purchases and some information has been omitted to simplify the example.The purchase returns and allowances journal is a Special Journal used to track these returns and allowances.He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.Entries from…