How to enter returned merchandise?


B

Brett

Consider that I buy a radio from Wal-Mart and enter it as:

Payee: Wal-Mart $35.00
Category: Electronics (expense)

During the same month, I bring the radio back for a full refund. I make the
following journal entry:

Payee: Wal-Mart $35.00
Category: Other Income: Merchandise Returne (income)

When I run the monthly income/expense report, the $35.00 is treated as an
expense and also appears with income. If I'd like to view only expenses or
income for the month, the report will be skewed. I could manually subtract
out the $35.00 but that becomes cumbersome with more similar transactions.
Is there a way to have these types of entries (purchase and return occuring
within the same month) disappear on expense and income reports since they
are irrelevant to the view I want?

Thanks,
Brett
 
Ad

Advertisements

C

Cal Learner-- MVP

Consider that I buy a radio from Wal-Mart and enter it as:

Payee: Wal-Mart $35.00
Category: Electronics (expense)

During the same month, I bring the radio back for a full refund. I make the
following journal entry:

Payee: Wal-Mart $35.00
Category: Other Income: Merchandise Returne (income)

When I run the monthly income/expense report, the $35.00 is treated as an
expense and also appears with income. If I'd like to view only expenses or
income for the month, the report will be skewed. I could manually subtract
out the $35.00 but that becomes cumbersome with more similar transactions.
Is there a way to have these types of entries (purchase and return occuring
within the same month) disappear on expense and income reports since they
are irrelevant to the view I want?
You can record the return with the Electronics (expense) category
and accept the warning.
 
S

Susan

I don't consider returned merchandise income, so I handle
this by setting up a category called "Remimbursable
Expense." When I realize that I am going to return an
item or if I know I will get a rebate I post the amount
of the return or rebate to Reimbursable Expense (instead
of whatever I would normally catagorize the purchase).
Then when I receive the credit or the rebate, I post it
to the bank account and reverse it out of Reimbursable
Expense. This is useful if you do alot of rebates because
you can track what has been received.

If you aren't interested in tracking, you can simply
enter the the entire purchase to the appropriate expense
category and then reverse it when you post the credit.
(The category is used when the purchase is made and then
when the deposit or credit is made to the bank or credit
card account. This will reverse the original entry.)

Hope this helps.
 
B

Brett

Cal Learner-- MVP said:
You can record the return with the Electronics (expense) category
and accept the warning.
This will credit to the expense category?

How will that appear in the report - debit then credit resulting in a null
change on total expenses for that month?

Brett
 
B

Brett

I don't understand what you mean by reverse. Are you using an income or
expense category when you reverse?

Thanks,
Bret
 
C

Cal Learner-- MVP

This will credit to the expense category?
Yes


How will that appear in the report - debit then credit resulting in a null
change on total expenses for that month?
If you don't like it, change it back.
 
S

Susan Jackson

Sorry that was unclear. All I mean is that when you purchase the item, you
record it in the checking or credit card account with a certain category as
a withdrawal or charge. When you return the item, you again record it in the
same account using the same category as a deposit or credit. The effect is
to "reverse" the original transaction.

In this scenario, you never use an income category at all.

Remember that the categories are there for your use to provide you with
information. You can set up the categories to be as individualized as you
like and use them in a way that gives you the information you need. Money
will probably pop up a dialog box asking if you are sure you want to use an
expense category for a deposit (or credit) and you will say "Yes!" You don't
want the return to show as income and you are right, it isn't income. It is
more of a "negative expense" so to speak. So, your record will show that you
had an expense and then that expense was "reversed," so your total expenses
for the period will be correct.
 
Ad

Advertisements

N

nataliemartsiano438

There are many companies interested in our track consumer behavior. Recently it was revealed that Apple and Android track the GPS locations of users in some versions of the operating system. There are vehicles which are installed in gps car tracking to always be possible to know what their position,not only in the case of auto theft. There are special applications for gpsdevices store, useful for monitoring the location of all devices
http://www.starcomsystems.com/partners/partners/
 

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

Top