Question

In case of sales return, the auditor should examine which documents?

• A. Credit notes, advice notes and inward return notes
• B. Debit notes, advice notes and inward return notes
• C. Purchase invoices, advice notes and inward return notes
• D. Credit notes, inspection report and inward return notes

Answer 1

The correct option is D Credit notes, inspection report and inward return notes

Goods returned by the customer is termed as sales return. Against the sales return a credit note is issued by the organization after due inspection of goods.

While vouching the sales return auditor should verify the inward return note along with the inspection report. Also need to ensure that credit note is issued with the correct value.