This presentation has been put together for VCE Accounting students studying purchase and sales returns. It shows they are accounted for in the stock cards.

1. Purchase/Sales Returns From the Stock Card Point of View

2. Impact on ledger accounts Purchase Returns ↓ Creditors Control (liability) ↓ Stock Control (asset) ↑ gst clearing (liability)

3. Sales Returns ↓ Sales (revenue) dr sales return ↓ Debtors Control (current asset) cr ↓ GST Liability (current liability) dr ↑ Stock Control (current asset) dr ↓ Cost of Sales (decrease expense) cr

4. The Stock Card Impact of Purchase Return Electro TVs had a balance of 5 digital TV sets on July 1st July 2nd Purchased 10 TV sets at $900 each plus $90 gst Inv 54 July 3rd Sold 4 TV sets for $2000 plus gst $200 each Rec 145 July 4th Returned 2 TV faulty TV sets Credit note 5

5. Electro TVs had a balance of 5 digital TV sets on July 1st cost price $800 plus $80 gst each July 2nd Purchased 10 TV sets at $900 each plus $90 gst Inv 54 July 3rd Sold 4 TV sets for $2000 plus gst $200 each Rec 145 July 4th Returned 2 TV faulty TV sets Credit note 5

6. What it looks like? 7200

7. What about the sales return? Digital TVs had opening balance of 1 digital TV at cost price $800 plus $80 gst, 8 TVs at $900 plus gst $90 on Aug 1 Sales of 4 TV sets for $2000 each plus gst $200 on Aug 2 Rec 46 2 TV sets were returned as they were faulty Credit note 64

8. Opening balance of 1 digital TV at cost price $800 plus $80 gst, 8 TVs at $900 plus gst $90 on Aug 1Sales of 4 TV sets for $2000 each plus gst $200 on Aug 2 Rec 462 TV sets were returned as they were faulty Credit note 64

10. This Week...... You are expected to Finish the summary questions p 311 Copy the ledger account p 306 in a Word document Complete practical exercises 15.1, 15.2, 15.4, 15.5, 15.7, 15.9, 15.11, 15.12, 15.13, 15.15, 15.16 Read chapter 16 Complete summary questions p 327 Commence practical exs16.1, 16.2