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Cancellation charges/fees

Others 823 views 9 replies

Atharv Sankliya

1359 Points Posted on 04 February 2023

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 ?

Replies (9)

CA Rashmi Gandhi

Chartered Accountant

86505 Points Posted on 04 February 2023

Whether you want journal entry or manner to deal such transaction.

Sumit

Accountant

22 Points Posted on 04 February 2023

I think firm should be raise the invoice of charges and buyer must get itc on this transaction.

CA Rashmi Gandhi

Chartered Accountant

86505 Points Posted on 04 February 2023

I don't think the query is for GST

Yasaswi Gomes new

Finance

4584 Points Posted on 04 February 2023

What is everyone talking here. There is assurance type warranties and service type warranties and cancellation provisions involved here. Plus customer options!

Yasaswi Gomes new

Finance

4584 Points Posted on 04 February 2023

I forgot the main thing,

Cr cancellation charges

Dr. Customer/debtors/receivablez

Yasaswi Gomes new

Finance

4584 Points Posted on 05 February 2023

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!

sabyasachi mukherjee

Profession Business

28207 Points Posted on 05 February 2023

It's ridiculous. Is it under a contract?

Atharv Sankliya

1359 Points Posted on 06 February 2023

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%