Question

Sales returns book is used to record __________.

• A. returns of fixed assets sold on credit
• B. returns of goods sold for cash
• C. returns of goods sold on credit
• D. none of above

Answer 1

The correct option is C returns of goods sold on credit

Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as "Credit note". The returned outward book is used to record return of goods purchased on credit.