Write the difference between return inwards and return outwards - Accountancy - Recording of Transactions - II

Question

Write the difference between return inwards and return
outwards

Saurabh Mehta · Accepted Answer

Basis of Difference

Return Inwards

Return Outwards

Meaning

Goods
sold to the customers, are returned by them

Goods
purchased are returned to the suppliers

Balance

It
has debit balance

It
has credit balance

Treatment

It is
deducted from Sales in the Trading Account

It is
deducted from Purchases in the Trading Account

Issued

Credit note is prepared by the seller

Debit
note is prepared by the buyer

Reduction

It
reduces the payment from the Debtors

It
reduces the payment made to the Creditors

Term

It is
also termed as Sales Returns

It is
also termed as Purchases Returns

Basis of Difference	Return Inwards	Return Outwards
Meaning	Goods sold to the customers, are returned by them.	Goods purchased are returned to the suppliers.
Balance	It has debit balance.	It has credit balance.
Treatment	It is deducted from Sales in the Trading Account.	It is deducted from Purchases in the Trading Account.
Issued	Credit note is prepared by the seller.	Debit note is prepared by the buyer.
Reduction	It reduces the payment from the Debtors.	It reduces the payment made to the Creditors.
Term	It is also termed as Sales Returns.	It is also termed as Purchases Returns.

Write the difference between return inwards and return outwards.