Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases to produce net purchases.

Purchase Returns And Allowances

Transactions where a buyer returns goods to the seller or receives a reduction in the purchase price for unsatisfactory goods.

Purchase Discounts

Reductions in price granted by suppliers to buyers for prompt payment or purchase volume.

Net Purchases

The total amount of goods purchased for resale, minus returns and allowances, plus freight and other acquisition costs.