What is meant by return Inward. Give it's entry.
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Returns inwards are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction:
A debit (reduction) of accounts payable
A credit (reduction) of purchased inventory
Returns inwards do not necessarily result in a reduction of the cost of goods sold, since goods that were returned might not necessarily have been sold to third parties during the accounting period. Returns inwards may not involve goods intended for sale by the buyer at all - they may instead be fixed assets or items intended to be consumed internally and charged to expense. If so, returns inwards may also result in a reduction of a fixed assets account, or an administrative expense.
Returns outwards are goods returned by the customer to the supplier. For the supplier, this results in the following accounting transaction:
A debit (reduction) of accounts payable
A credit (reduction) of purchased inventory
Returns inwards do not necessarily result in a reduction of the cost of goods sold, since goods that were returned might not necessarily have been sold to third parties during the accounting period. Returns inwards may not involve goods intended for sale by the buyer at all - they may instead be fixed assets or items intended to be consumed internally and charged to expense. If so, returns inwards may also result in a reduction of a fixed assets account, or an administrative expense.
Returns outwards are goods returned by the customer to the supplier. For the supplier, this results in the following accounting transaction:
Vickypanjiyar:
entry??
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Return inward is a policy under which, goods sold are returned to the seller.
The entry will be..
SalesReturn account..D/r.
To purchase account.
The entry will be..
SalesReturn account..D/r.
To purchase account.
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