Question

Returned goods by Uday is ₹300 — Write a Journal entry.

Answer 1

Answer:

sales return a/c 300

to uday a/c 300

Answer 2

Journal entry for goods returned by Uday

Sales return A/c . . . Dr - 300

• To Uday - 300

( Being goods returned by Uday )

Explanation:

Since sales is a revenue, sales return is a decrement in revenue. According to the modern rule of debit and credit, revenue is debited on decrease. Hence sales return is to be debited.

Uday was our debtor but now, his liability is decreasing as per the return of goods. Debtor is an asset. But now debtor is decreasing and we know that assets are credited on decrease. Therefore Uday needs to be debited.