The Sales Returns and Allowances account normally has a debit balance.

Question

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The Sales Returns and Allowances account is a contra-revenue account that is used to record the amount of sales that are either returned by customers or are reduced due to allowances or discounts. Since these items reduce the overall revenue of the business, the Sales Returns and Allowances account is a contra-revenue account that normally has a debit balance.

The Sales Returns and Allowances Account Normally Has a Debit