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How to treat a meterial credit note

Material credit note issued in following financial year

Afternoon,

I have a credit note from a supplier which was raised in the following year for goods which were returned in the previous year. The credit is material.

Could someone please explain how I would go about this in year end adjustments, I assume it will be relating to the accrual concept.

Any other information that would help let me know.

Thank you in advance.

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15th Aug 2018 13:11

If the goods have left the premises, they won't be in stock.

They need to be removed from purchases too, notwithstanding that the paperwork is dated after the year end.

Try and think of stuff like this as though it was the only transaction in the year. It helps clarify thought.

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16th Aug 2018 12:37

Check that the credit note wasn't actually accrued at year end first. As Lion said the items shouldn't be in stock so the cost would normally be removed in that corresponding period.

Assuming you haven't filed the accounts: If then you find that the accounts were materially wrong merely credit Purchases and Dr Trade Creditor

If you have filed then consider if there is a PYA to do in the current year stats re corresponding period.

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