In this blog, we continue looking at the sales transaction and T accounts journals, related to the sale on credit terms. So far, you have already learned about nominal accounts used for discounts and returns of goods. How do we journal when goods are returned, but the customer has already paid? For a cash refund, I will use a Refund liability nominal account until it is paid through the bank to our customer. Other nominal codes are as usual Sales and Receivables to record a sale, then Cash and Receivables to show the payment is made, Sales Return and Sales to show the return of an item, Sales Return and Refund Liabilities to show that now we have a debt to pay to the client, and finally when the liability is cleared - Refund Liability and Cash nominal accounts. For simplicity, I omit the COGS and Inventory nominal accounts, but those would be the same and additional part as in the previous blog post. Example as follows, we sold on credit terms and received payment the next day in ful