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In dealing with the sales day book and the sales return day book, if a supplier dose not record any sale but has a return for a particular customer, what will be the treatment?
Example:
Sales day bookDate Invoice customer Ref Amount($)
4/1/18 1 Max RL12 60Sales Return Day Book
Date Invoice customer Ref Amount($)
4/1/18 1 Max RL12 50
4/1/18 2 Ernie RL2 450What will be entered into the accounting ledgers in double entry format.
The double entry for returns is to Dr Returns and Cr Receivables.
There must have been a sale to the customer at some stage in the past (otherwise they could not be returning anything) and therefore the amount owing for the sale would still be part of the balance on the receivables account.
The entries are all explained in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
(And do be aware that you can never be asked in the exam to write up any of the day books, even though you are expected to know how they are used.)
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