How to Account for Sales Returns and Allowances Journal Entry.

[@ntsoakisuping9601]

Good day Sir. As we expected the return of of products on Journal entry 1 @ 6:30.are we not supposed to recognise a liability of R5000 for that return and Revenue be recognised at R95 000 as you mentioned that we should record according to estimates.

[@ChristysaysRawrr]

Are we supposed to reduce COGS for the 2 tablets that haven't been returned yet? Seems inappropriate to reduce COGS yet

[@matthewgreen6652]

If there is sales tax included, do they have to return that amount as well?

[@AccountingLectures]

You are no longer responsible for sales tax after a sales return. Please visit my website for more resources farhatlectures.com/

[@takewalk]

So my accounting already handles the returns, but then I usually take those returns and sell them on ebay. What is the COGS on that item when it sells on ebay? Is it the same COGS, or is it zero?

[@claire1388]

are allowance for sales return and allowance and refund liability the same?

[@MichaelJohnKoontz]

Yes, sales return and allowance is a contra asset for A/R and refund liability is a separate account but either account is used. So the sales on account are estimated to have 5% returns. Debit the contra revenue account sales returns and allowances and credit either the allowance for sales returns and allowances or the refund liability account.

[@rehamzakaria6622]

Can you tell me pls ..what is the journal entry? When the goods returned after collection of all A/R

[@1027Giants]

I think you would debit the allowance and credit a payable if it was one of the previously estimated returns

[@belindabenjamin5247]

Isn't there an error at 6:30 of video for the journal entry?

[@mecomingtomo6933]

Looks like there a few issues, bc he wrote the cost was 600 per tablet but computed 60 and he had 10,000 credit for 100,000 debit in cash

[@rickyl5484]

When do we use refund liability?

[@YOLO-gp2on]

I would say upon sale should recognise refund liability for any estimate returns and then adjust on the reporting date if estimate changes.

[@rehamzakaria6622]

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