DOC

9 Accounting: The Returns Journal

By Kristen Robertson,2014-05-05 13:41
24 views 0
9 Accounting: The Returns Journal

    53062554.docs Page 1/6

9. The Returns Journals

I. Credit Notes and Debit Notes

Credit Note is a document received by a customer, showing allowance given by a supplier in respect of

    unsatisfactory goods.

    Credit Notes means the customer’s account in supplier’s book will be credited with the amount of goods

    returned.

    3. Issue Credit Note

     Supplier Customer 1. Sell goods to

     2. Returns faulty goods

Debit Note is a document commonly sent by a business to a supplier to claim for an allowance in respect of

    damaged goods.

    Debit Note means the supplier’s account in customer’s book will be debited with the amount of goods

    returned.

    3. Issue Debit Note too

     Supplier Customer 1. Sell goods to

     2. Returns faulty goods

Examples

    2003

    May 1 Wong purchased goods on credit from H. Lee $300

    May 3 Wong returned goods to H. Lee $30

    In Wong’s Book (Issue __________ Note)

    Purchases2003$$

    May 1H. Lee300

    53062554.docs Page 2/6

    H. Lee (Creditor)

    $2003$

    May 1Purchases300

    Debit Note

    Returns Outwards

    $$

    In H. Lee’s Book (Issue ____________ Note)

    Sales

    $2003$

    May 1Wong300

    Wong

    2003$$

    May 1Sales300

    Credit Note

    Returns Inwards

    $$

    53062554.docs Page 3/6

II. How returns inwards are recorded?

     Credit Note

     Total returns inwards Returns Inwards Journal credited to debtor’s debited to Returns Inwards account separately Account Book of original entry for returns inwards

    Sales Ledger General Ledger

     Debtor Mr. Wong Returns Inwards Account

     X X

    Debtor Best View Ltd.

     X

Example

    Lee Company Ltd. has the following transactions during the month of June 1996.

    June 16 Mr. Wong returned $150 faulty goods to Lee Company Ltd. (A sample credit note is given below)

June 28 $50 goods were returned by T. Tung Ltd.

53062554.docs Page 4/6

    53062554.docs Page 5/6

III. How returns outwards are recorded?

    Debit Note

    Total returns outwards Returns Outwards Journal Debited to creditor’s credited to Returns account separately Outwards Account Book of original entry for returns outwards

     Purchases Ledger General Ledger

     Creditor Mr. Chan Returns Outwards Account

     X X

     Creditor Happy Ltd.

     X

Example

Lee Company Ltd. has the following transactions during the month June 2003

June 15 Lee Company Ltd. returned $100 faulty goods to ABC Ltd. (A sample debit note is given below)

June 25 $120 goods were returned to T. Shing.

53062554.docs Page 6/6

Report this document

For any questions or suggestions please email
cust-service@docsford.com