Goods returned from customers are recorded in return inwards book.
Return inwards reduces the business total accounts receivables. For business, return inwards decrease the revenue and for the customer, it decreases the receivables for business.
The journal entry for a return inward book is as follows −
|Return inwards A/c|
To customers Ac
The reasons for inward returns are as follows −
The advantages for the return inward book are as follows −
The return inward process is explained below with the help of a diagram −
The format for the return inward book is as follows −
|Date||Name of customer||Credit note||folio||Amount|