Get Goods Returned Voucher

Debit Note is a document issued to a party stating that you are debiting their Account in your Books of Accounts for the stated reason or vice versa. It is commonly used in case of Purchase Returns, Escalation/De-escalation in price, any other expenses incurred by you on behalf of the party etc.

Sales Return in terms of payroll journal entry can be defined as the one which shall be used to account for the customer returns in the books of account or to account for when there is a return of goods sold by the customer due to defective goods sold, or misfit in requirement of the customer, etc.

Is sales return an expense? No, sales returns are not an expense. However, the cost of goods sold is reduced when there are sales returns. This is because the cost of the returned items is deducted from the total cost of goods sold.

When they are returned to the supplier of the goods, the cash account or accounts payable account for the cash purchases or credit purchases will be debited with a corresponding credit to the purchase return account as there is the return of the goods out of the company to the supplier.

When the material is returned to the supplier after the purchase, in that case purchase return voucher is prepared.

You can record purchase returns or de-escalation of the purchase value (both local and interstate) against an earlier purchase transaction using a debit note. You can use the voucher mode of credit note to record the escalation of purchase value.

When merchandise is returned, the sales returns and allowances account is debited to reduce sales, and accounts receivable or cash is credited to refund cash or reduce what is owed by the customer. A second entry must also be made debiting inventory to put the returned items back.

If you are recording the sales returns before receiving the payment, you can select the reference as Agst Ref while linking the credit note to the sales invoice. Open the credit note voucher screen and specify the buyer details.