Return Accounts

Usually, a company has 2 return accounts:

1. Return Inwards Account
2. Return Outwards Account

Return Inwards Account is used to record amount of goods return by customers to the business while the Return Outwards account is used to record amount of goods return by the business to the supplier.

Return Accounts are needed so that when good returned, the amount will not be recorded to the Sales Account and Purchase Account. This is to help the company to track clearly the total amount of goods sold and purchased and also the amount of goods returned by customers or goods returned to supplier.