Journal Entry Sales Return

 

SALES RETURN (RETURNS INWARD, RETURNED FROM DEBTOR, RETURNED FROM CUSTOMER)

Here, sales return mean goods or inventory or merchandise returned by customer.

Generally, credit sales inventory is returned.

There are different reasons for goods returned such as defective, damaged or excess in quantity.

Sales returns or return inward is deducted from sales.

It is debited in journal entry.

Sales Return

Sales return account            To Mr A’s account         To XYZ Traders account           To Debtors or Customers account  (Being- sales return from …………………….)          .

Dr

Value of goods return Goods return from person Goods return from firm Name of person or firm not given

Decrease in revenue Decrease in assets Decrease in assets Decrease in assets

Journal Entry

In the book of …………

Date	Particulars		LF	Amount Dr	Amount Cr
	Sales return account             To Mr A’s account         To XYZ Traders account           To Debtors or Customers account  (Being- sales return from …………………….)	Dr		xxxx xxxx	xxxx

Keep in Mind (KIM)

When business goods are sold on credit, defective or excess goods are retuned by customers. sales return = return inward = return from customers = return from debtors It is opposite entry of goods sold.

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PROBLEM: 15

Nepalgunj Fancy House, wholesaler of fancy garments has following transactions:

Nov 1,      Goods returned from PK Fancy House Rs 8,000.

Nov 6,      Sales returned from MK Jeans Wear Rs 15,000. 

Nov 12,   Return inward from Manisha Fashion House Rs 20,000

Nov 18,   Return from customers worth Rs 10,000

Nov 24,   Return from debtors worth Rs 5,000

Nov 28,   Return inward from MR Fashion World Rs 4,000.

Required: Journal entries

Journal Entries

In the book of Nepalgunj Fancy House

Date	Particulars		LF	Amount Dr	Amount Cr
Nov, 1	Sales return account            To PK Fancy House account (Being- sales returned from PK Fancy House)	Dr		8,000	8,000

Journal Entry for American Style

Date			Debit  $	Credit $
Nov, 1	Merchandise (inventory) return account                                PK Fancy House account   To record sales returned from customer		8,000	8,000

Journal Entry for European Style

Date				€	€
Nov, 1	Merchandise (inventory) return account                                           PK Fancy House account   To record sales returned from customer	Dr		8,000	8,000

 

Journal Entries

In the book of Nepalgunj Fancy House

Date	Particulars		LF	Amount Dr	Amount Cr
Nov, 6	Sales return account            To MK Jeans Wear account (Being- sales returned from MK Jeans Wear)	Dr		15,000	15,000
Nov,12	Sales return account            To Manisha Fashion House (Being- sales returned from Manisha Fashion House)	Dr		20,000	20,000
Nov, 18	Sales return account            To Customers account (Being- sales returned from customers)	Dr		10,000	10,000
Nov, 24	Sales return account            To Debtors account (Being- sales returned from debtors)	Dr		5,000	5,000
Nov, 28	Sales return account            To MR Fashion World account (Being- sales returned from MR Fashion World)	Dr		4,000	4,000

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PROBLEMS AND ANSWERS

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

Basic Problem: 15       SALES RETURN

Dharan Hardware House, wholesaler of hardware and glass has following transactions:

   1 July:   Goods returned from PK Plywood Home Rs 10,000.

   5 July:   Sales returned from MK Glass House Rs 9,000.

15 July:   Return inward from Manisha Hardware Rs 8,000.

25 July:   Return from customers worth Rs 7,000.

28 July:   Return from debtors worth Rs 6,000.

29 July:   Return inward from MN Furniture Rs 5,000.

Required: Journal entries

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