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Question

The credit notes issued are used to prepare sales return book.

A
True
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B
False
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Solution

The correct option is A True
When defective goods are returned by the customer a note is prepared by a supplier which is called as "credit note". This note is prepared and sent to customer indicating that his/her account has been credited in firm's books. A duplicate copy of the credit note is retained and used as a source document for recording the transactions in the books of accounts.

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Rectify the following errors:

(a)

Credit Sales to Mohan Rs 7,000 were recorded in purchases book.

(b)

Credit Purchases from Rohan Rs 900 were recorded in sales book.

(c)

Goods returned to Rakesh Rs 4,000 were recorded in the sales return book.

(d)

Goods returned from Mahesh Rs 1,000 were recorded in purchases return book.

(e)

Goods returned from Nahesh Rs 2,000 were recorded in purchases book.

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