Hello,
When creating a sales return two additional distributions were added for $250.00. Were does this get pulled from?
| Account # | Type | Debit | Credit |
| 1100 | RECV | $ 575.00 | |
| 4010 | SALES | $ 575.00 | |
| 1500 | INV | $ 250.00 | |
| 1502 | INV | $ 250.00 | |
Thanks!
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ShellyAnn,
Bill is on the money, when you book a Return transaction, there are two distinct transactions which are reversed. The first is Payment vs. Income - in this case Receivables versus Sales. This one looks normal, which is likely why you referred to the other entries as extra distributions. If you were doing just a Credit Memo, this would be the whole transaction. Receivables are Credited and Sales are Debited (the opposite of a sales transaction)
Since you are doing a return for credit, the other half of the transaction, or extra distributions, account for the return of goods. Now here is where things get interesting. If an item is returned, and can be sold again, then the COGS (Cost of Goods Sold) and Inventory accounts would would need to be reversed, and items would be returned to inventory. In this case COGS is Credited and Inventory is Debited (the opposite of a sale of inventory transaction).
It is also entirely possible your merchandise is not returned to the company, or to inventory (for any number of reasons - i.e. too expensive to ship to be worthwhile, it was damaged during transit, etc.). If this is the case your inventory account should not be debited - another account like damages, damaged goods not returned, etc. should be.
Hope this clears things up.
So looking at this again - it appears that the sale moved the cost into 1502 and when the return was done the 'unused' rental had to be moved out of there and back into the inventory.
Anyway. Have a nice night.
Do you have a cost associated to the 'items' being returned on the Sales document?
If so, is it possible that this is the amount that is being returned?
Hi Bill!
The 1502 is under " Pumps ( Future Rentals)" The 1500 I believe is inventory?
What are the 1500 and 1502 Acounts?
It is my assumption that the cost of the inventory item being returned might be the dollar values.
Let me know.
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