Returns inwards and outwards

Emilie
Emilie Registered Posts: 37 ? ? ?
Hello,

I am just not getting my head round returns in wards and outwards. Am i correct in thinking that they go on the P&L account. But where abouts.

Thanks,

Emilie

Comments

  • wolfe
    wolfe Registered Posts: 121 ? ? ?
    hi
    return inwards are sales returns so the treatment is to dedct it from sales figure. the resultant figure is net sales.

    the returns outwards are purchase returns so deduct it from the purchases figure.
  • Bookworm55
    Bookworm55 Registered Posts: 479
    Yes they do get included in the P&L, by adjusting the sales and purchases figures.

    Returns inwards are goods the company has sold, but have been rejected and returned by the customers. The sales need to be 'un-accounted' for; so you deduct returns inwards from sales.

    Returns outwards are goods the company has bought, but have rejected and returned to their supplier. The purchases need to be 'un-accounted' for; so you deduct returns outward from purchases.
  • A-Vic
    A-Vic Registered Posts: 6,970
    Sales returns are a cost to a business


    Where as Purchases returns are a plus (take from purchases - so it would be:-

    Opening stock +
    Purchases (purchase Returns) -
    Closing stock
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