Write the difference between return Inwards and return ouwards.
Return Inwards
1) The return inwards arises when goods that are sold are returned back and hence it has to be deducted from the amount of sales.
2) The return inwards account deals with goods returned by customers.
3) It is also called Sales Return.
4) Example:- Let’s suppose a customer ‘Star Pvt Ltd.’ returned goods worth Rs 5,000 to ‘Unreal Corp.’ The journal entry to record these sales returns in the books of Unreal Corp. will be as follows;
| Return Inwards A/c | 5,000 |
| To Star Pvt. Ltd. A/c | 5,000 |
Return Outwards
1) Return outwards are goods returned by a customer to the seller.
2) They are also called Purchase returns.
3) Outward returns reduce the total accounts payable for a business.
4) Example :- Let’s suppose that a company “Unreal Pvt Ltd.” returned goods worth 10,000 to its supplier ‘Star Pvt Ltd.’ The journal entry to record these returns in the books of Unreal Pvt Ltd. will be as follows;
| Star Pvt. Ltd. A/c | 10,000 |
| To Return Outwards A/c | 10,000 |
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Return Inwards
1) The return inwards arises when goods that are sold are returned back and hence it has to be deducted from the amount of sales.
2) The return inwards account deals with goods returned by customers.
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Step-by-step explanation:
• Return Inwards
•
• 1) The return inwards arises when goods that are sold are returned back and hence it has to be deducted from the amount of sales
•
• 2) The return inwards account deals with goods returned by customers
Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.
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