Sales Returns and Allowances is a(n)
A)asset account.
B)contra asset account.
C)expense account.
D)contra revenue account.

Question

Quizplus · Accepted Answer

Sales Returns and Allowances is a contra revenue account because it is used to reduce the amount of revenue recorded from sales. When a customer returns a product or receives an allowance, the revenue from the original sale is reduced and Sales Returns and Allowances is debited. By having a separate contra revenue account, the business is able to track the specific amount of sales that are being returned or discounted.

Sales Returns and Allowances Is A(n)