Sales Returns Book


Sales Returns Book:

Learning Objectives:

  1. Define and explain sales return book.

  2. What is a credit note?

  3. Prepare a sales returns book and post into ledger.

Definition and Explanation:

Sales returns book is also called returns inwards book. It is used for recording goods returned to us by our customers. The ruling of this books is exactly as for sales day book.

Posting:

The of the returns inwards book or sales returns book is debited to returns inwards account or sales returns account. The customers who have returned the goods are credited with the amount shown against their names.

Credit Note:

Customers who return goods should be sent a credit note. It is a statement sent by a business to another person showing the amount credited to the account of the later. Credit notes are serially numbered and are similar in form to the invoices. These are usually printed in red ink. Credit notes issued to customers are vouchers for the entries appearing in the sales returns book.

Form of Credit Note:

Messrs Ideal Traders, Peshawar
Cr. in account with Messrs Good luck & Co.. Lahore
Lahore,
March 19, 1991
By 100 shirt at $2
Goods returned as per I/No………Dated…….
Dollars two hundred only
200
E. & O. E. For Good luck & Co.
Partner

Format of Sales Returns Book:

The following is the format of sales returns book:

Date Particulars C/N L.F. Amount

Example:

From the following transactions of a trader prepare the sales returns book and post it into ledger:-

1991 $
January 8 Goods returned by Parker & Co. 40
“     20 Goods returned by Ideal Traders $52 52
“     31 Allowance granted to Riaz & Co.., for short delivery 100

Solution:

Sales Returns Book

Date Particulars D/N L.F. Amount

1991
Jan. 8
“  20
“  31


Parker & Co.
Ideal Traders
Riaz & Co.

$
40
52
100
192

Sales returns Account

1991
Jan. 31


By Sundries as per S.R.B

$
192


Parker & Co.



1991
Jan. 8


By Sales returns

$
40

Ideal Traders


1991
Jan. 20


By Sales returns

$
52

Riaz & Co.



1991
Jan. 31


By Sales returns

$
100

You may also be interested in other articles from “subdivision of journal” chapter:

  1. Definition and Explanation of Cash Book
  2. Single Column Cash Book
  3. Two Column Cash Book/Double Column Cash Book
  4. Three Column Cash Book
  5. Bank Reconciliation Statement
  6. Petty Cash Book
  7. Purchases Day Book
  8. Purchases Returns Book
  9. Sales Day Book
  10. Sales Returns Book
  11. Bills Receivable Book
  12. Bills Payable Book
  13. Journal Proper

Other Related Accounting Articles:

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