Concept:Returning goods to a supplier reduces the amount owed and is recorded through a contra purchases entry.
Explanation:When goods are returned to the supplier, the business no longer owes the supplier for those goods.
Therefore, the liability in the Supplier's Account decreases.
A decrease in a liability is recorded on the debit side.
So, the Supplier's Account is debited.
At the same time, the returned goods are not purchases that the business keeps.
These returns are recorded separately in the Purchases Returns Account.
Since the value of purchases is being reduced, the Purchases Returns Account is credited.
This follows the double entry principle: one account is debited while another is credited.
Hence, the correct treatment is to debit Supplier's Account and credit Purchases Returns Account.
Answer:Debit Supplier's Account; credit Purchases Returns Account.
Correct option: C