Accounting system for sales returns
The system for accounting for sales returns is very similar to the process for accounting for sales. The key difference is one for is sales and the other is for returns, as a result they basically are opposites of each other and are recorded in the reverse.
Key Differences Between Sales & Sales Returns
- Credit notes are used instead of invoices.
- A sales returns day book is used instead of a sales day book.
- A sales returns account is used instead of a sales account.
- Entries are still made to the receivables ledger.
Flowchart of Process
