Sales Return Book

Sales return book is also called “return inwards book”. Sometimes, the goods which are sold by a business tend to be defective or of poor quality, therefore, the customer will return them back to the firm. Hence, the book in which such transactions are recorded is known as Sales return book.

However, only goods which are sold on credit basis are recorded in this book.

All returns are primarily recorded in the sales return book unless the returns are not that frequent, in which case they are recorded in the journal.



After the sales return book is properly updated and all transactions are entered into it, the total of the items is transferred to the ledger in an account called the “Sales returns account”.

Step 1: Posting to personal accounts of debtors: Each entry in the sales returns book is posted to the credit side of the respective personal account of the debtor on daily basis by writing the words ‘By Sales returns account’.

Step 2Posting to Sales returns account: At the end of the month, the aggregate of the sales returns is posted to the debit side of sales returns account by writing the words ‘To Sundry debtors A/c’.



The following journal entry is passed to record the sales returns :

Sales Return A/c   (Dr)    …………

          To  Debtors A/c  (Cr)   ………….


A credit note is prepared by the seller &  sent to the buyer when goods are returned . A duplicate copy of which is kept for recording and reference purposes. The credit note consists the name of the customer, the details of the goods that are returned and the reason for the return. Every credit note has a date and is numbered serially. They serve as vouchers for the entries appearing in the sales returns book.


Thus, in simple words  a Sales Return Book is one of the 8 subsidiary books which is used to record all the transactions relating to the goods returned by the customers.

Accounting & Finance for Banking

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