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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:

Format of Sales Returns Book:

The following is the format of sales returns book:

Example:

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

Solution:

Sales Returns Book

Sales returns Account

Parker & Co.

Ideal Traders

Riaz & Co.

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

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