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Level 3

Question

when to recognize customer returns

Forum|Forum|7 years ago
March 31, 2019
1 reply
2 views

I had 2 sales last year (nov and dec) that got returned. Customers sent back their products and I issued them a refund in Jan 2019. Can I deduct the refunds from my 2018 sales or do I have to wait for 2019?

Does this have anything to do cash vs accrual?

Thanks.

Income

Level 11

You can do it either way. If you deduct it from your 2018 income, then you're done and don't have to deal with it on the 2019 return. If you leave the income on the 2018 return, then for the 2019 return you report the refund in the "returns and allowances" section.