Question

Subsidiary book in which return of goods sold on credit is recorded ____________.

• A. Sales return book
• B. Purchase return book
• C. Sales book
• D. Purchase book

Answer 1

The correct option is A Sales return book

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". A duplicate copy of credit note is used to record the transaction in the sales return book and the original copy is sent to the original party who returned the goods i.e. customer.