Question

how will you do the pricing of return of surplus material?​

Answer 1

Answer:

Materials returned to vendors may be recorded at invoice price or in accordance with the method adopted for pricing out material issues. Recording of materials returned at invoice price is not realistic as the price per unit granted by vendor on return of materials cannot be the same as the original invoice cost.

Necessary adjustments for discount, freight, carriage inward etc., shall have to be made to arrive at the same. Therefore, returns should be valued according to the method adopted for pricing out material issues and entered in the ‘Issued Column’ in Stores Ledger.