Sales Returns & Allowances is a ______ account and is ______ when goods are returned by customers for a refund.
A) contra-asset; debited
B) contra-revenue; credited
C) contra-revenue; debited
D) contra-asset; credited

Question

Quizplus · Accepted Answer

Sales Returns & Allowances is a contra-revenue account as it reduces the revenue earned from sales. When goods are returned by customers for a refund, the contra-revenue account needs to be debited to record the decrease in revenue. Therefore, the correct answer is option C - contra-revenue; debited.

Sales Returns & Allowances Is a ______ Account and Is