SALES RETURN

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ranjan chakraborti (Querist)
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17 December 2009 WHETHER SALES RETURNS AND CREDIT NOTES ISSUED FOR EARLIER YEAR SALE FOR WRONG BILLING, RATE DIFFERENCE WOULD BE ADJUSTED IN CURRENT YEAR'S SALE AFTER LAST YEAR'S BALANCE SHEET HAS BEEN FINALISED? WHAT ARE THE CONCERNED IAS REGARDING THIS?

-------------RANJAN CHAKRABORTI

shakuntala chhangani

shakuntala chhangani (Expert)
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18 December 2009 whether goods were sold on approval basis?

ranjan chakraborti

ranjan chakraborti (Querist)
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21 December 2009 CERTAINLY GOODS WERE SOLD ON APPROVAL BASIS AS PURCHASER CAN REJECT GOODS SOLD.

WHAT ABOUT RATE DIFFERENCE ? WHAT IS THE CONCRNED IAS AND IT'S PROVISIONS ?------

RANJAN CHAKRABORTI

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ranjan chakraborti

ranjan chakraborti (Querist)
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21 December 2009 CERTAINLY GOODS WERE SOLD ON APPROVAL BASIS AS PURCHASER CAN REJECT GOODS SOLD.

WHAT ABOUT RATE DIFFERENCE ? WHAT IS THE CONCRNED IAS AND IT'S PROVISIONS ?------

RANJAN CHAKRABORTI

shakuntala chhangani

shakuntala chhangani (Expert)
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22 December 2009 Dear, there are many reasons for return of goods other than on sale on approval. Anyway, when the goods are sold on approval, at the year end, while finalising the a/cs, you need to pass the following two entries :
Sales A/c Dr. XX (at selling price)
To DFebtors A/c XX (only if included in sales)
Stock on Approval A/c Dr. XX (at cost)
To Trading A/c XX
You should not finalise the accounts without passing these two entries. As far as rate difference is concerned, if it was known upto the date of finalisation of A/c, it will go to related year,s P/l A/c else will be taken in the current period.As far as wrong billing is concerned, it is an error. Apply AS 5. Regards,
CA Shakuntala Chhangani