Question

Under Sales or Return or approval basis when the transactions are large and the seller sends the goods on approval or return basis, the accounting treatment will be -

• A. No Journal Entry
• B. Entry in Sales or Return Journal
• C. Entry in Sales or Return Day Book
• D. Sundry Debtors A/c Dr.
  To Sales A/c

Answer 1

Answer: (C)

Entry in Sales or Return Day Book

When goods are sent on Sale or Return basis, record is made in the Sales or Returns Day Book.

At the end of the period, the total should be posted to the credit of Sale or Returns Total Account while individual items should be debited to the individual customers account. When goods are ap­proved or rejected by the customers, record is made immediately in Sales and Returns book.