How to show sales return in trial balance?

Sales Return is shown on the debit side of the Trial Balance.

Sales Return is also called Return Inward.

Sales Return refers to those goods which are returned by the customer to the seller of the goods. The goods can be returned due to various reasons. For example, due to defects, quality differences, damaged products, and so on.

In a business, sales is a form of income as it generates revenue. So, when the customer sends back those goods sold earlier, it reduces the income generated from sales and hence goes on the debit side of the trial balance as per the modern rule of accounting Debit the increases and Credit the decreases.

For Example, Mr. Sam sold goods to Mr. John for Rs 500. Mr. John found the goods damaged and returned those goods to Mr. Sam.

So, here Sam is the seller and John is the customer.

The journal entry for sales return in the books of Mr. Sam will be

Treatment in Trial Balance