Using a contra-revenue account for sales returns and allowances instead of directly reducing the sales account allows a retailer the following advantage:
A)Increase profits by using accounting methods.
B)Track the value of goods returned.
C)Create more work for the accounting department.
D)Increase sales by bringing more products.

Question

Quizplus · Accepted Answer

Using a contra-revenue account for sales returns and allowances allows a retailer to track the value of goods returned separately from the sales account, providing better insight into the reasons for returns and identifying potential problem areas. This also allows for more accurate reporting of net sales, which is an important metric for evaluating the overall financial health of a company.

Using a Contra-Revenue Account for Sales Returns and Allowances Instead