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  13. (Accounting) Credit goods returned...

(Accounting) Credit goods returned from customer

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The following describes the accounting transactions the system creates when you credit a VAT based item returned from a customer. In this example the goods returned should update the stock on hand. Note: This example refers to (Accounting) Invoice items with VAT in system currency, but only the first item is returned. In addition, the postage fee is also credited.

Prerequisites

Returned qty 12
Sales price item 1 50.00
Discount on order line 5%
Order discount on order header 10%
Cost price 25.00 SEK
VAT item 1 25%
Postage fee 80.00 SEK
VAT postage fee 25%

Created transactions

These transactions are for the returned Item 1.

Transaction type Description Amount
Debit		 Amount
Credit		 Calculation/Result/Additional info
820 Sales value Gross VAT 600.00  
Sales price * Quantity

50.00 * 12 = 600.00
821 Line discount VAT   30.00
Sales price * Quantity * Discount on order line

50.00 * 12 * 0.05 = 30.00
822 Order discount VAT   57.00
((Sales price * Quantity) – (Sales price * Quantity * Discount on order line)) * Order discount on order header

((50.00 * 12) – (50.00 * 12 * 0.05)) * 0.10 = 57.00
960 VAT output of order lines 128.25  
(Sales value Gross VAT – Line discount VAT – Order discount VAT) * VAT percentage of VAT handling code

(in SEK): (600.00 – 30.00 – 57.00) * 0.25 = 128.25

This transaction is the VAT amount for the sales value of of the returned Item 1.
800 Cost of goods sold   300.00
Cost price * Quantity

25.00 * 12 = 300.00

If the cost type is:

  • Standard cost, the cost price is retrieved from the Standard cost field in the Item file.
  • Average purchase price, the cost price is retrieved from the Average cost field in the Item file.
  • FIFO, you have to enter the cost price on the sales order line when the credit order is entered.
901 Stock value 300.00  
Cost price * Quantity

25.00 * 12 = 300.00

The cost price is retrieved/entered as described in Cost of goods sold above.
827 Postage VAT 80.00   Postage fee
961 VAT output of order 20.00  
80.00 * 0.25 = 20.00

VAT amount of postage fee
802 Coin adjustment   0.25
In this example the figures are:

Total net sales value in SEK: 600.00 – 30.00 – 57.00 = 513.00
Postage: 80.00
Total VAT amount: 128.25 + 20.00 = 148.25
Total in SEK: 513.00 + 80.00 + 148.25 = 741.25
Invoice total in SEK: 741.00
Coin adjustment in SEK: -741.25 – (-741.00) = -0.25

In the Currency table for the SEK currency, the Adjust inv amount field is 1.00, which means that invoice amounts should always be rounded off to the nearest even Swedish krona.
A/R To be accounted on Account Receivable   741.00  

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