Sales Returns Book
Also known as Returns Inward Book or Sales Returns Journal.
Purpose
To record the return of goods previously sold on credit by customers.
Reasons: Same as purchase returns (defective, wrong item, etc.).
Credit Note
When we accept returns, we send a Credit Note to the customer.
- It informs the customer that we have credited their account (reduced the amount they owe us).
- "Your account has been credited" = "You owe us less money".
Format of Sales Returns Book
| Date | Name of Customer (Account to be Credited) | Credit Note No. | L.F. | Details (₹) | Total Amount (₹) |
|---|---|---|---|---|---|
Solved Example
Record the following in Sales Returns Book of M/s Ram Electronics for April 2024:
-
Apr 06: Ramesh Traders returned:
- 1 TV (screen damaged) @ ₹20,000
- Less: Trade Discount @ 10%
-
Apr 15: Suresh & Co. returned:
- 2 Music Systems (sound issue) @ ₹5,000 each
- Less: Trade Discount @ 5%
Solution: Sales Returns Book
In the books of M/s Ram Electronics
| Date | Name of Customer | C.N. No. | L.F. | Details (₹) | Total (₹) |
|---|---|---|---|---|---|
| 2024 | |||||
| Apr 06 | Ramesh Traders, Pune | 51 | |||
| 1 TV @ ₹20,000 | 20,000 | ||||
| Less: Trade Discount @ 10% | (2,000) | 18,000 | |||
| Apr 15 | Suresh & Co., Nagpur | 52 | |||
| 2 Music Systems @ ₹5,000 | 10,000 | ||||
| Less: Trade Discount @ 5% | (500) | 9,500 | |||
| Apr 30 | Total | 27,500 |
Ledger Posting
-
Customer Accounts (Debtors):
- Credit each customer's account.
- Reason: Asset (Receivable) decreases.
- Example: Credit Ramesh Traders with ₹18,000.
-
Sales Returns Account:
- Debit the Sales Returns Account with the Total at month-end.
- Entry: "To Sundries as per Sales Returns Book ... ₹27,500".
Quiz
Test Your Knowledge
Question 1 of 5
1. Sales Returns Book records:
💡 Final Wisdom: "Credit Note = Credit the Customer. It's an apology letter in accounting form: 'Sorry the goods were bad, we've reduced your bill!'"