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Error of Principles

What type of ...

Question

What type of account is sales returns?

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Solution

Sales returns are considered a contra revenue account as sales returns reduce the revenue of the business.

Also read:

Cash Book

Purchase Book

Sales Book and Sales Return Book

Cash Flow Statement

Ledger in Accounting

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Q. Rectify the following errors assuming that Suspense Account was opened. Ascertain the difference in Trial Balance.
(a) Credit sales to Mohan ₹ 7,000 were recorded in Purchase Book. However, Mohan's Account was correctly debited.
(b) Credit purchases from Rohan ₹ 9,000 were recorded in Sales Book. However, Rohan's Account was correctly credited.
(c) Goods returned to Rakesh ₹ 4,000 were recorded in Sale Returns Book. However, Rakesh's Account was correctly debited.
(d) Goods returned from Mahesh ₹ 1,000 were recorded through Purchase Returns Book. However, Mahesh's Account was correctly credited.
(e) Goods returned to Naresh ₹ 2,000 were recorded through Purchases Book. However, Naresh's Account was correctly debited.

From the following Subsidiary Books prepare necessary ledger accounts and balance them.

Sales Book
Date	Particulars	Outward Invoice No.	L.F.	Amount Rs
2011 Apr.1	Amit			6,000
5	Pravin			8,000
20	Santosh			4,000
30	Mehta and Co.			12,000
	Total			30,000

Sales Return Book
Date	Particulars	Credit Note No.	L.F.	Amount Rs
2011Apr. 1	Pravin			2,000
2	Santosh			1,000
	Total			3,000

Q. Enter the following transactions in the Sales Return Book of Raj Computers, Delhi:

2018
July 1	Sohan & Sons returned 2 Laptops HP sold @ ₹ 40,000 each plus CGST and SGST @ 6% each
July 2	Ramesh & Sons, Noida returned 2 'Ricoh' printers sold @ ₹ 10,000 each plus IGST @ 12%
July 25	Dinesh, Chandigarh returned 10 HP Desktops sold @ ₹ 20,000 each plus IGST @ 12% for delayed supply
July 26	Computer Mouse returned by Ravi, Delhi sold to him for cash ₹ 2,000 plus CGST and SGST @ 6% each

Write up the Ledger Accounts.

Error of undercasting sales return book is rectified by _____ the sales returns account.

The total of Sales Return book is posted to the ___ of sales return account.

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