Calculating sales and returns

The income tax summary report shows amounts for “gross receipts or sales” and “returns and allowances.” If you subtract the amount for “returns and allowances” from the amount for “gross receipts and sales,” you'll get an accurate total to report for net sales on your income tax form. Because of the way that QuickBooks tracks returns and discounts, however, the amounts for “gross receipts or sales” and “returns and allowances” may not be accurate. Follow this procedure if you need accurate amounts for “gross receipts or sales” and “returns and allowances” in addition to net sales.

To calculate sales and returns:

  1. Choose Reports > Accountants & Taxes > Income Tax Summary.
  2. When the report appears, make sure that the date range shown in the Dates field corresponds to the tax period you want the report to cover.

    If the date range is incorrect, choose the correct date range from the list.

  3. In the report, make a note of the amounts shown for “Gross receipts or sales” and “Returns and allowances.”

    What the amounts represent: The amount given for “Gross receipts or sales” is the net sum of all of your sales for the taxable year, including returns you entered as credit memos or refund checks. The amount given for “Returns and allowances” is the total of all the discounts you gave, either as line items on a sales form or as discounts for early payment. Even though the report says “Returns and allowances,” the total shown does not reflect all of your returns and allowances if you issued any credit memos or refund checks during the year.

  4. In the report, double-click the amount for “Gross receipts or sales” to create a QuickZoom report about your sales.
  5. Add the Debit and Credit columns to the QuickZoom report:
    • In the report buttonbar, click Customize.
    • In the Customize Report window, click “Debit” and “Credit” in the Columns list.
  6. Scroll to the end of the QuickZoom report to display the totals for the Debit, Credit, and Amount columns. On your tax form, enter the Credit total as your gross sales. Example
  7. Add the Debit total in the QuickZoom report to the total shown for “Returns and Allowances” in the tax summary report. Enter the result on the line for returns and allowances on your tax form. Example
  8. Subtract the amount you calculated for returns and allowances in Step 7 from the Credit total shown on the QuickZoom report. Enter the result on the line for net sales on your tax form. Example