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