Sales Return Book

Learn how goods returned by customers are recorded systematically

📘 What is a Sales Return Book?

A Sales Return Book is a subsidiary book used to record goods returned by customers that were previously sold on credit.

It is also known as the Returns Inward Book because goods are returned inward to the business by customers.

📘 Why is a Sales Return Book Used?

When customers return goods that were previously sold on credit, recording every return separately in the Journal would be inconvenient.

Therefore, all such transactions are recorded systematically in the Sales Return Book.

📘 Transactions Recorded

The Sales Return Book records the following types of transactions:

• Return of goods sold on credit by customers.
• Goods returned because of defects or poor quality.
• Goods returned because they are not according to order.
• Excess goods returned by customers.

📘 Simple Example

Suppose a business sold goods worth ₹10,000 to ABC Traders on credit.

Later, goods worth ₹2,000 were found defective and were returned by ABC Traders.

This return of ₹2,000 will be recorded in the Sales Return Book.

⭐ Important Point

The Sales Return Book records returns of goods sold on credit.

If goods sold for cash are returned, the transaction is generally recorded through the appropriate Cash Book, not in the Sales Return Book.

📘 Source Document

When goods are returned by a customer, a Credit Note is generally prepared by the seller.

The Credit Note serves as evidence of the goods returned and provides the details required for recording the transaction.

📘 Purchase Return vs Sales Return

Purchase Return	Sales Return
Goods returned to suppliers	Goods returned by customers
Also called Returns Outward	Also called Returns Inward
Debit Note	Credit Note

📘 Quick Summary

• Sales Return Book is also called Returns Inward Book.
• It records goods returned by customers.
• It records credit sales returned.
• Defective or unwanted goods may be returned by customers.
• The usual supporting document is a Credit Note.