Credit Notes to be issued for rejected goods

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Krishna (Querist)
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03 September 2009 Dear Experts,

We need your urgent attention here for the following matter -:

We exported some goods through our company in Jan 09 and Feb 09

Now our customer wants return some goods due to Quality Control Rejections.

Our customer wants us to issue some credit notes due to the amount of USD 25,000

How can we show the entries to the books.

And to what Invoice nos we show credit note as ?

Please help ?

Kaustuv

Kaustuv (Expert)
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03 September 2009 when you invoiced you made:-

Sundry Debtors...Dr.

To Sales

Now, recognise the return of goods and issuance of credit note as,

Sales Return....Dr.
To Sundry Debtors

Sales should be disclosed net of returns. Alternatively, you could also debit sales. That is not recommended.

Credit note should bear reference to the original invoices issued. Let me know if it clears your doubt.

Krishna

Krishna (Querist)
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03 September 2009 The goods were exported outside India

And now will come back to India.

The customer wants to pay for the new goods but

Will deduct payment from the Proforma Invoice ?

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Kaustuv

Kaustuv (Expert)
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03 September 2009 I take an example. Suppose you originally sold the goods to Mr. A for Rs. 100.

Mr. A...Dr. 100
to Sales 100

Sales Return ....Dr. 100
to Mr. A 100

New sales worth Rs. 125,

Mr. A...Dr. 125
to Sales 125

Now I don't understand your problem. He wants to pay how much amount?

Krishna

Krishna (Querist)
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05 September 2009 Ok here is the breif -:

We have TWO COMPANIES dealing with ONE CLIENT

We export goods in Partnership with the following transaction

Export/ Sale price - Rs 11.25
Total qty - 3500

Customer says total Rejections - 1000

The partnership company does not take rejection of 1000

Our Second Company, will take these rejection of 1000

But second company sells goods at Rs 11.75
Qty - 8000

Tell me what to do with this, as we have to bring the goods back.

And keep the customer happy and also our profits.
:)

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