Journal Entry for Sales Return

Journal Entry for Sales Return

Journal entry for Sales return shall be recorded in the books of accounts by debiting the sales return account and crediting the cash/bank or receivable (as case may be). There are two ways of recording the journal entry for sales return.

In first method a reverse entry is passed by debiting the sales account and crediting the relevant account which may be cash, bank or individual receivable account.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Sale		xxx
01-01-2017	Cash/Bank			xxx

In second method sales return is debited to a new income contra account i.e. sales return account. The Sales Return account is debited and cash/bank or receivable is credit. (as case may be).

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Sales Return		xxx
01-01-2017	Cash./bank			xxx

 Journal Entry for Cash Sales Return

Journal entry for cash sales return is recorded by debiting the sales return account and crediting the cash account.

Date	Particular	Ledger Folio	Dr.	Cr.
01-01-2017	Sales Return		xxx
01-01-2017	Cash			xxx

Journal Entry for Credit Sales Return

Journal entry for credit sales return shall be recorded by debiting the sales return account and the individual receivable account shall be credit.

Date	Particular	Ledger Folio	Dr.	Cr.
01-03-2015	Sales Return		xxx
01-03-2015	Receivable			xxx

Examples of Journal Entries for Sales Return

1.    Ali returned the Sales amounting 150,000/-

2.    Raheel paid 80,000 for cash sales return.

In first transaction the sales return account would be debit being decrease in income and ali is credit for a refund (liability) to be paid.

Date	Particular	Ledger Folio	Dr.	Cr.
01-04-2017	Sales Return		xxx
01-04-2017	Ali			xxx

In second transaction the sales return is debited and cash is credited being decrease in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
01-08-2017	Sales Return		xxx
01-08-2017	Cash			xxx