I have an accounting query re the Sale return:
In the F.Y. 2005 -06 , a company has sold 5000 Kg. of material to a manufacturing concern.The concern had made payment of the full amount and has issued requisite sale tax forms.
In the FY 2006-07, the concern closes down and the unused material of 1000Kg lying with them, sends back.
What should be accounting treatment of the same in two Fin years?
As it is said that the goods are sold and even the amount due on that is paid to the co. but the sales return was in FY 2006-2007, there will be no accounting effect in the FY 2005-2006.
But in the FY 2006-2007 so much of the goods returned are to be treated as the purchases.
CAclubindia
