BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The returns of goods purchased
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The returns of anything purchased
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The returns of goods sold
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The return of assets sold
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Detailed explanation-1: -Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as “Credit note".
Detailed explanation-2: -Sales return book is a book in accounting that records all those transactions related to the returns of goods and items by the customer which were earlier sold to them on credit.
Detailed explanation-3: -Sales book records only credit sale of goods. It does not record cash sales of goods or credit sales of assets.
Detailed explanation-4: -Hence, the Sales Return Book is used to record the goods sold which are returned by the customers. However, the sales returns book is used to record only the goods which were earlier sold on a credit basis. A credit note is made to prepare each return of the goods and is prepared in duplicate.
Detailed explanation-5: -A Sales book is a record of all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales. The amount entered in the sales book is on behalf of invoices supplied to purchasers.