Hi All
This was a question asked to me earlier this year in an interview, and i still do not know 100% what the answer should exactly be
So here goes the question
Keeping matching concept of accounting in Mind
IF a company does a sale on say 29/3/2012, and the same item has been returned on 24/4/2012, to which year the sale return be accounted.
2011-12? if so then the date of sales return being next year will cause problem related to credit note the debtor will issue and also transaction cannot be accounted before it happens... right?
or
2012-13? if this then the matching concept of acccounting goes wrong, as it relates to transaction of previous year
or can we show the sales return as a prior period item, if so, then for a big company the single sales return might be too immaterial to show as prior period item in P &L
So what should be the treatment, explain with reason
CAclubindia
