Purchase Returns – is a contra expense account with a credit balance used by a buyer to record the

value of previously purchased goods returned to a seller due to being damaged, defective, or otherwise
undesirable.

Purchase Discounts – is a contra expense account with a credit balance that records the value of
purchase cost deductions granted by a seller if a buyer makes a payment within an allowable time
period, used as an incentive to encourage prompt payment of invoices

Purchase Allowances – is a contra expense account with a credit balance that records the value of
purchase cost deductions granted by a seller in exchange for a buyer retaining damaged, incorrect or
otherwise faulty goods instead of returning them to the seller.

Bad Orders - damaged, defective, or otherwise undesirable items or products.