XSIQ
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Accounting - Credit note accounting equation
Credit note accounting equation
For the party returning the goods (Stewart) the effect on the accounting
equation is:
* an decrease in the asset stock
* a decrease in the liability creditors
For the party receiving the returned goods (Alex) the effect on the
accounting equation is:
* an increase in the asset stock
* a decrease in the asset debtors
These transactions may be recorded in the general journal in the manner
stated above.
Reasons for goods being returned include:
* the goods are damaged
* the goods are not in the quantity ordered
* the goods do not match the description
* the goods do not meet the quality required
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