Write the difference between return Inwards and return ouwards.

Question

✓

Answer

Basis of Difference	Return Inwards	Return Inwards
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.

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

2012
April 1	Purchased a second-hand machinery for ₹ 40,000.
April 1	Spent ₹ 10,000 on repairs for making it serviceable.
Sept. 30	Purchased additional new machinery for ₹ 20,000.
Dec. 31	Repairs and renewals of machinery ₹ 2,000.
2013
March 31	Depreciate the machinery at 10% p.a.

Cheques amounting to ₹ 15,000 were drawn in March 2015, out of which cheques for ₹ 5,500 were presented for payment on 3rd April.
A cheque for ₹ 5,475 was deposited into the bank, but wrongly entered in the Cash Book as ₹ 5,745.
A cheque of ₹ 5,000 which was received from a customer was entered in the cash column of the Cash Book in March 2015 but was omitted to be banked in the month of March.
A B/P of ₹ 10,000 was retired by the bank under a rebate of ₹ 100 but the full amount of the bill was credited in the Cash Book.
Bank charges entered in the Cash Book twice ₹ 200.

Out of total cheques amounting to ₹ 16,000 deposited, cheques amounting to ₹ 9,000 were credited in June 2014, Cheques amounting to ₹ 3,000 were credited in July 2014, and the rest have not been collected so far.
Out of total cheques amounting to ₹ 45,000 drawn, cheques amounting to ₹ 7,500 were presented in June 2014, Cheques amounting to ₹ 18,000 were presented in July 2014, and the rest have not been presented so far.
Amount wrongly credited by bank ₹ 3,400.
Payment side of the Cash Book has been undercast by ₹ 200.
Cheques recorded in the Cash Book in June 2014 but sent to bank in July 2014 ₹ 2,500.
A cheque of ₹ 20,000 deposited in the bank has been dishonoured but no intimation was received till June 2014.

Salary paid ₹ 5,000 was debited to employee’s personal account.
Rent Paid ₹ 4,000 was posted to landlord’s personal account.
Goods withdrawn by proprietor for personal use ₹ 1,000 were debited to sundry expenses account.
Cash received from Kohli ₹ 2,000 was posted to Kapur’s account.
Cash paid to Babu ₹ 1,500 was posted to Sabu’s account.

(i)	Cheques deposited, but not yet credited by the bank	75,450
(ii)	Cheques issued, but not yet presented for payment	80,760
(iii)	Bank charges not yet recorded in the cash book	1,135
(iv)	Cheques received by the bank directly from trade debtors	1,35,200
(v)	Insurance premium paid by the bank as per standing instructions, but not yet recorded in the cash book	15,400
(vi)	Dividend collected by the bank, but not yet recorded in the cash book	1,000