Return inward is deducted from purchases.
Explanation: Return inward implies goods that are returned by the customers of a firm. In other words, it can also be termed as sales return. Thus, return inward is deducted from the sales of the firm so as to ascertain the amount of net sales. However, Return outward is deducted from the amount of purchases.
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Solution Return Inward is Deducted from Purchases. Concept: Adjustments - Unrecorded Purchases and Sales.