Credit Memo's


G

Greg Maxey

This may be more of an accounting question but I thought someone here might
be able to answer.

When I sell something to a customer I record the income in an account called
"Bulk wholesales."

Sometimes some of the things I sell spoil or go bad. When I go back to a
store I give my customers a credit and pick up the spoiled items.

I issue the customer a credit memo for the amount of the spoiled items that
they then apply to the cost of the new items that they buy.

I then do a Journal entry to debit a "Loss, spoileage, refund" expense
account and credit my "Bulk wholesales" expense account the cost of the
spoiled items.

Is this the correct way to do this?

Thanks.

--
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Greg Maxey - Word MVP

My web site http://gregmaxey.mvps.org
Word MVP web site http://word.mvps.org
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 
Ad

Advertisements

D

DL

Your sale/invoice is to a Sales/income account
The credit is a credit to the customer against Account Cost of
Sales/Spoilage

Your next invoice to the customer is for the full amount, their settlement
to you is for this less the credit
There is no expense account involved.
 
Ad

Advertisements


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

Credit memo 0
Credit Memos 0
USA Credit Memos 3
MOA2007: credit memos 0
negative credit memo 3
Applying Credit Memos 1
Apply Credit Memo 1
credit memo question 0

Top