ACCA Applied Knowledge · Financial Accounting · Sales and purchases
Which book of prime entry is used to record credit notes issued by a business to customers for goods returned by them?
Credit notes issued to customers for returned goods are recorded in the sales returns day book. This book of prime entry lists returns inwards, and totals are posted to the sales returns account and the receivables control account. Purchases returns relate to supplier credit notes instead.
- ASales returns day bookCorrect
- BPurchases returns day book
- CCash book
- DPetty cash book
Explanation
When a customer returns goods, the seller issues a credit note and records it in the sales returns day book (returns inwards). The purchases returns day book records credit notes received from suppliers. The cash book and petty cash book record cash and bank movements, not credit adjustments.
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