NOTES

A firm sends goods on sale or return basis. Customers having the choice of returning the goods within a month. During May 2016, the following are the details of goods sent:

 Within the stipulated time, P and Q returned the goods and B, D, and E signified that they have accepted  the goods. Show in the books of the firm, the Sale or Return Account and Customer- P for Sale or Return Account on 15th June, 2016

X supplied goods on sale or return basis to customers, the particulars of which are as under.

Goods are to be returned within 15 days from the dispatch, failing which it will be treated as sales. The books of ‘X’ are closed on the 31st December, 2016.

Prepare the following accounts in the books of ‘X’.

(a) Goods on “sales or return, sold and returned day books”.

(b) Goods on sales or return total account.

Ram sends his goods to some of his customers on Approval or Return basis. The cost of the product is Rs. 8,000 per unit and a markup of 25% on cost is used. The following information is given -

Goods sent to customers during the period = 25 units.

Goods returned by customers before approval period = 6 units.

Goods approved by customers before end of the financial period = 16 units.

Goods with customers pending approval (period not expired) = 3 units.

Ram accounts for these transactions as Ordinary Sales. Give the Journal Entries for the above.

Krishna regularly sends goods to his customers on Approval or Return basis. The cost of the product is Rs. 4,000 per unit and a markup of 1/3^rd on Price is used. The following information is given for the month of January -

B and C approved the goods within the stipulated time, while A and E have rejected and returned the goods on 27^th. In respect of D, the time period for acceptance has not yet elapsed. Show the accounting entries in the SIR Day Book, Sale or Return Account (in SIR Ledger).