The normal balance of the Sales Returns and Allowances account is
A) a credit.
B) a debit.
C) zero.
D) It doesn't have a normal balance.

Question

Quizplus · Accepted Answer

Sales Returns and Allowances is a contra-revenue account, which means it offsets revenue. Since revenue accounts normally have a credit balance, the contra-revenue account, like Sales Returns and Allowances, has a debit balance to reduce the total revenue reported.

The Normal Balance of the Sales Returns and Allowances Account