The accounting implications of a direct return are also similar to a usage order return. (Refer to the Order Return/Direct Return (Intracompany) transaction in the Accounting Activities Table.) The key difference between a usage order return and a direct return is the default unit cost that the NCAS applies to the return. The default unit cost for a usage order return is the average cost of the item at the time of issue. The default unit cost for a direct return is the current average cost of the item at the time of return. The default unit cost for a direct return can also be overridden at the time that the return is recorded in the NCAS.

For example, your customer returned the tube of ointment because she did not need to use it immediately. However, by the time she returned the tube, your warehouse had already received additional tubes of ointment. The issuing cost of a tube of ointment is now $2.16 (average cost of $2.06 plus a storage overhead of $0.10). The updated issuing cost is applied to the direct return. The following accounting entries are generated for this direct return:
 

	Debit	Credit
Inventory (XXMEDICAL)	2.06
Storage Overhead (XXMEDICAL)	0.10
Reserve for Inventory (XXMEDICAL)		2.16
Expense Offset (XXMEDICAL)	2.16
Usage Expense (XXMEDICAL)		2.16