Which of the following is the correct classification of Sales Discount account?

Name: Which of the following is the correct classification of Sales Discount account?
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Question

Quizplus · Accepted Answer

Sales Discount is a contra revenue account because it reduces the total revenues reported on the income statement. Revenue accounts have a normal credit balance, and since sales discounts decrease the amount of revenue, they are recorded as a debit, opposite to the normal revenue account balance.

Which of the Following Is the Correct Classification of Sales