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.
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.
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?
Are we supposed to reduce COGS for the 2 tablets that haven't been returned yet? Seems inappropriate to reduce COGS yet
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.
If there is sales tax included, do they have to return that amount as well?
You are no longer responsible for sales tax after a sales return. Please visit my website for more resources farhatlectures.com/
are allowance for sales return and allowance and refund liability the same?
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.
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?
Can you tell me pls ..what is the journal entry? When the goods returned after collection of all A/R
I think you would debit the allowance and credit a payable if it was one of the previously estimated returns
Isn't there an error at 6:30 of video for the journal entry?
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
When do we use refund liability?
I would say upon sale should recognise refund liability for any estimate returns and then adjust on the reporting date if estimate changes.
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