Sales Book and Sales Return Book

Every business records varying amounts of sales in their day to day operations. For a small business it can be a hundred sales in a day while for large corporations, it can be around thousand to ten thousand sales per day.

Of these transactions some items get returned due to some issues arising from factors such as wrong product, defective product, bad user experience of customers, etc. Therefore, it becomes necessary to record all the transactions related to sales and sale returns so as to have a proper idea about the sales and returns taking place per day or an accounting period.

What is a Sales Book?

Sales book is a book of original entry or a subsidiary book that is used to record the credit sales of the goods. The sales that are made by cash are recorded in the cash books and credit sale of any other asset apart from goods are recorded in the journal proper.

Goods here refer to the items that a business is selling as a part of its core sales function. The invoice that is supplied to the purchasers of goods acts as the source document for the financial entry.

What is a Sales Return Book?

Sales return book also known as Return Inwards Book is one of the eight subsidiary books in accounting. It is the original book of entry where transactions related to return of goods sold are recorded. Unless the returns are taking place frequently, the transactions can be recorded.

The return of goods that are on a cash basis are not recorded in the Sales return book.

Goods can be returned by the customer for the following reasons:

1. Bad or defective product.

2. Delay caused in supplying goods to customers.

3. Goods sold do not match with the original.

4. Goods that are excess in supply.

5. A situation where there is a breach of contract between the purchaser and the seller.

Goods that are returned to the business are recorded, it is done by issuing a credit note in favour of the purchaser, which shows accounts have received the credit.

This was all about the topic of Sales Book and Sales Return Book, which is an important topic of Accountancy for Commerce students. For more such interesting articles, stay tuned to BYJU’S

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