Sale or return
Sale or return is a term sale, where the seller sold goods on the
basis of return, there might be a chance of return of goods, or acceptance of
goods, or acceptance of part of goods. This method is also called the Sale on
Approval basis.
In this technique, only some
journals can complete the sum. So be careful while reading so that there would
be a scope of full marks on it.
Method:
|
Date
|
Particulars
|
Amount(Dr)
|
Amount(Cr)
|
|
1.
|
When we sent goods to our customers:(normal sale process)
Debtors
A/C ……Dr
To
Sale A/C
(Being the goods sold on sale or
return basis.)
|
xxxx
|
xxxx
|
|
2.
|
If the customer accepts the goods them no entry is to be made. But if
they return those goods, them the journal would be (as like return)
Return
inward A/C ……Dr
To
Debtors A/C
(Being the goods
return on the sale or return basis)
|
xxxx
|
xxxx
|
But,
this entry would to have in the accounting year. And, when the customer takes
the goods at the same price, then no entry has to be made. We already passed a
sale entry. But when the time changes, price might also change to upper or
lower price.
[Invoice
price: the price when the goods actually sold]
Method:
|
Date
|
Particulars
|
Amount(Dr)
|
Amount(Cr)
|
|
|
When the invoice price is higher than
the last sent price, then we had to add the extra price
Debtors
A/C….Dr
To
Sales A/C
(Being the goods sold on over sale)
|
Extra
price
|
Extra price
|
|
|
When the Invoice Price is lower than the last sent price, then we
should reduce the extra price.
Sales
A/C …… Dr
To
Debtors A/C
(Being the goods sold on under
sale)
|
Extra
Price
|
Extra
price
|
Example :
|
If the goods sent on Rs. 100 per unit, &
the amount is now Rs. 120 per unit, then
Debtors
A/C….Dr
100
To Sales A/C
100
&
Debtors
A/C….Dr
20
To Sales A/C
20
|
If the goods sent on Rs. 100 per unit,
& the amount is now Rs. 90 per unit, then
Debtors
A/C….Dr
100
To Sales A/C
100
&
Sales
A/C….Dr
10
To Debtors A/C 10
|
At the end of the year, when the goods are not yet confirmed
& also, not accepted, then we have to calcel the sale process for temporary
action-
|
Date
|
Particulars
|
Amount(Dr)
|
Amount(Cr)
|
|
|
Sales
A/C….Dr
To
Debtors A/C
(Being the goods sold on approval basis,
not yet confirmed)
|
Price
of unsold goods
|
Price of
unsold goods
|
Important : We calculate all the entries upon sales price/ invoice
price, but not on cost price. Yet, when we have to calculate the stock, we have
to take the cost price.
The Journal would be
|
Date
|
Particulars
|
Amount(Dr)
|
Amount(Cr)
|
|
|
Stock
with customers A/C….Dr
To
Trading A/C
(Being the stock adjusted with sale on
approval basis)
|
Cost
Price of unsold goods
|
Cost Price
of unsold goods
|
Example : If the goods sent costing 100
per unit,. & invoice was 120 per unit, the stock would be calculated on Rs.
100, not on Rs. 120.
