Which of the following accounts is always treated as a contra revenue and not as a selling expense?
A) Net sales
B) Purchase returns and allowances
C) Cash equivalents
D) Sales returns and allowances

Question

Quizplus · Accepted Answer

Sales returns and allowances are always treated as a contra revenue account because they represent a reduction in revenue rather than a selling expense. Purchase returns and allowances, on the other hand, are treated as a deduction from the cost of goods sold.

Which of the Following Accounts Is Always Treated as a Contra