Vouching of Sales Return
Goods which have been sold when return by the customer on account of poor quality, defectiveness or due to other reasons are accounted in Sales Returns Book. The auditor should bear in mind the following points while vouching them:
1. The auditor should vouch the entries in the Sales Returns Book with the Gatekeepers Returns Inwards Book and Stock Register.
2. Auditor should verify the copy of the Credit Note issued to the customer and ensure that the credit note is properly authorized and signed by a responsible officer.
3. He should check the postings from the Sales Returns Book to the Sales Returns Account and Customer Ledger.
4. He should verify the returns from the customers at the beginning and end of the year.
5. He should ensure that goods returned by the customers are included in closing stock and are valued at cost or market price whichever is less.
Books and Documents to be Vouched: (1) Sales Returns Book, (2) Credit Note, (3) Customers ledger, (4) Gatekeepers Returns Inwards Book, (5) Stock Register.
On 8.2.2017, Ram & Co. returned 10 shirts @ Rs.200 each to X Ltd.
Auditor should vouch the transaction in the following manner:
1. Verify credit note which is issued to the creditor or supplier for goods returned.
2. Verify entry in Sales Returns Book with respect to credit note, date of return, name of customer and amount of return.
3. Verify entry in Debtors or Customers Account with regard to date and amount of return.