The sales returns and allowances account is
A)a contra-asset account.
B)a contra-revenue account.
C)on the balance sheet.
D)on the statement of shareholders' equity.

Question

Quizplus · Accepted Answer

The sales returns and allowances account is a contra-revenue account that is used to reduce the amount of sales revenue reported on the income statement. It is not an asset account and not reported on the balance sheet or statement of shareholders' equity (although it will indirectly impact these statements).

The Sales Returns and Allowances Account Is