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Refunds made to customers and sales returns is not same

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Refunds made to customers and sales returns is not same

  • This topic has 1 reply, 2 voices, and was last updated 11 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • July 28, 2024 at 6:40 am #708903
    ncell
    Participant
    • Topics: 27
    • Replies: 4
    • ☆

    The receivables’ account at 1 May had a balance of $32,750. During May, sales of $125,000 were made on credit. Receipts from receivables amounted to $122,500 and contras with the payables’ account of $550 were allowed. Refunds of $1,300 were made to customers. What is the closing balance at 31 May on the receivables’ account?
    Answer in the Book:$33,400 debit.
    I am not convinced with the answer in the book. My answer is $36,000 debit. Book has treated refunds made to customers as sales returns but I am not happy with this. Please kindly explain this sir.

    July 28, 2024 at 9:34 am #708908
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The correct answer is indeed $36,000. Refunds are simply a repayment of cash previously received.

    Which book are you using?

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