sale or return

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Dear all<BR><BR>would someone be able to explain to me how 'sales' made on sale or return basis are recorded on accouting systems (double entry bookeeping) and also VAT implications + at what point is VAT recognised if standard VAT rate is applicable<BR><BR>thank you

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    sale or return

    VAT is recognised at the 'Tax Point'. This is based upon the earliest of ;delivery, invoicing or payment. However if you raise an invoice within 14 days of delivery then the tax point is established on the invoicing date.<BR><BR>If you sell goods on sale or return (with credit terms) and the goods are returned within 14 days of their despatch then invoice and record VAT on the 'actual' goods sold. If you invoice on despatch or the goods are returned after 14 days then you are going to have to enter the returned goods with DR Sales a/c ( Sales Returns a/c), DR VAT a/c and CR Debtors ( assuming credit sales )<BR><BR>HTH<BR><BR>David
  • System
    System Posts: 100,534 🤖 Admin 🤖
    sale or return

    For goods sold on sale or return, the tax point arises when the goods have been adopted or after 12 months, if sooner.<BR>Adopted means when the holder of the goods does something to indicate that he is not going to exercise the option to return the goods.

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