a firm supply some goods to customer but due to some reason it was cancelled by customer and firm refund the 80% amount and charge 20% as cancellation fees
how do we record it ?
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Cancellation charges/fees
Replies (9)
Quick Summary
Whether you want journal entry or manner to deal such transaction.
I think firm should be raise the invoice of charges and buyer must get itc on this transaction.
I don't think the query is for GST
What is everyone talking here. There is assurance type warranties and service type warranties and cancellation provisions involved here. Plus customer options!
I forgot the main thing,
Cr cancellation charges
Dr. Customer/debtors/receivablez
Sale 100, refund 80, cancellation, 20!
It's like a ...
Debtor Dr. 100
Cr sales 100
Cr. Note 80
Dr. Sales 80
And
Dr loss on customer cancellation
Cr. Bank.
But
Bank 20 Dr
Sales 20 Cr
I'm a genius!
It's ridiculous. Is it under a contract?
I want to ask that whether the whole transaction of sale is reversed and then we book the cancellation charges as income ,or just reverse the transaction at 80%
Reverse the transaction @ 80%
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