Gyan Prasad Sahu (B.Com) (24 Points)
14 September 2013Hi,
We have goods sold to a customer while in transit it is damaged and customer refused to take the delivery of the goods. We have file an insurance claim and surveyor has salvaged this goods for some amount. Shall we issue an invoice for salvage of goods.
Now what are the accounting entries for the above transactions. Shall we have to reverse the sale by issuing sales return credit note to the customer.
Pls advise urgently
Thanks
Gyan Prasad
One Of A Kind
(CA Final & CS Professional Student)
(187 Points)
Replied 14 September 2013
According to me the entry would be
Sales Return A/c Dr
To Debtor's A/c
(Entry passed for the return of goods to the customer)
and
Bank A/c Dr
Loss in transit a/c Dr.
To Goods destroyed in transit A/c
(Bank A/c to be debited with the amount received from the insurance co., and the normal loss should be divided among all the goods)
Shivani
(Learner)
(1881 Points)
Replied 16 September 2013
Correct me if I am wrong
1. this is rejection of goods rather than sale return.
sale is not complete as goods have not been accepted by the buyer.
2. instead of goods lost in transit we need to credit Purchase A/c to reduce stock.
shivani
One Of A Kind
(CA Final & CS Professional Student)
(187 Points)
Replied 16 September 2013
Acc to me
1.If the entry for sale has already been made at the time of dispatch of the goods then it will be return of the goods sold.
2. If the goods includes VAT then we cannot reverse the purchase.
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