If A Company Failed To Record Goods Returned By Customers
If a compa ny fails or forget to record goods returned b y customers due to some reasons such as defective or damaged goods, which is also called Sales Returns , t he n t he amou nt of Sales in Income Statement or Profit And Loss Account overstated w hich also causes N et Income or N et Profit to increase. If complete entry is not recorded t he n the value of Accou nts Receivab le / Su ndry Deb tor, which is a Curre nt Asset, on b ala nce s heet also overstates which i ncreases t he total assets. The e ntry to record for t he goods retur ned b y customer is show n b elow: Sales Retur ns a/c XXX ...