Question

what is the journal entry for sales return and why. please help ASAP​

Answer 1

Answer:

Journal entry is as follows:

Return inwards in cash transaction

Cash a/c dr

To sales a/c

(Goods sold)

Cash is real a/c and comes in so debited

Sales is income and nominal a/c so credited

Return inwards a/c dr

To cash a/c

( sales return)

Return inwards is debited as goods are coming in (return from buyer )

Cash goes out and is real a/c so credited

Return inwards in credit transaction

Debtors a/c dr

To sales a/c

(Goods sold on credit)

Debtors are asset for business so debited

Sales in income and nominal a/c so credited

Return inwards a/c dr

To debtors a/c

( sales returns)

Debtors which was asset earlier is now no more asset as goods are returned back so credited