a firm supply some goods to customer but due to some reason it was cancelled by customer and firm refund the 80% amount and charge 20% as cancellation fees
how do we record it ?
9 Replies
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 04 February 2023
Whether you want journal entry or manner to deal such transaction.
Sumit
(Accountant)
(22 Points)
Replied 04 February 2023
I think firm should be raise the invoice of charges and buyer must get itc on this transaction.
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 04 February 2023
I don't think the query is for GST
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 04 February 2023
What is everyone talking here. There is assurance type warranties and service type warranties and cancellation provisions involved here. Plus customer options!
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 04 February 2023
I forgot the main thing,
Cr cancellation charges
Dr. Customer/debtors/receivablez
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 05 February 2023
Sale 100, refund 80, cancellation, 20!
It's like a ...
Debtor Dr. 100
Cr sales 100
Cr. Note 80
Dr. Sales 80
And
Dr loss on customer cancellation
Cr. Bank.
But
Bank 20 Dr
Sales 20 Cr
I'm a genius!
sabyasachi mukherjee
(27664 Points)
Replied 05 February 2023
It's ridiculous. Is it under a contract?
Atharv Sankliya
(1356 Points)
Replied 06 February 2023
I want to ask that whether the whole transaction of sale is reversed and then we book the cancellation charges as income ,or just reverse the transaction at 80%
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 07 February 2023
Reverse the transaction @ 80%
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