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What do you mean by return inwards and return outwards book?

Asked by Pearlrodrigues(student) , on 5/11/12


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EXPERT ANSWER

Return Inwards Book - When the goods sold to the customers are returned by them, it is known as Return Inwards. The Return Inwards has a debit balance. As the goods sold have been returned by the customers, therefore it is deducted from the Sales while preparing the Trading Account. The return inwards reduces the balance of debtors. It is also termed as Sales Returns. The book that is prepared to record return of goods from the customers to whom the goods had sold on credit is known as Return Inwards Book or Sales Returns Book.

 

Return Outwards Book - When the goods purchased by the firm are returned to the suppliers, it is known as Return Outwards. The Return Outwards has a credit balance. As the goods purchased have been returned to the suppliers, therefore it is deducted from the Purchases while preparing the Trading Account. The return outwards reduces the payment made to the creditors. It is also termed as Sales Returns. The book that is prepared to record return of goods to the suppliers from whom the goods were purchased is known as Return Outwards Book or Purchase Returns Book.

Posted by Komal Verma(MeritNation Expert)on 5/11/12

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