Asked by Tyler Evans on Apr 28, 2024
Verified
The normal balance of the Sales Returns and Allowances account is:
A) a credit.
B) a debit.
C) zero.
D) It does not have a normal balance.
Sales Returns
Transactions where customers return previously purchased merchandise, leading to a deduction from the gross sales to arrive at the net sales figure.
Debit Balance
A situation where the total debits exceed the total credits in an account.
- Comprehend the attributes and the influence of sales returns and allowances on financial disclosures.
Verified Answer
JC
Jordan CasonApr 29, 2024
Final Answer :
B
Explanation :
Sales Returns and Allowances is a contra-revenue account, which means it offsets revenue. Since revenue accounts normally have a credit balance, the contra-revenue account, like Sales Returns and Allowances, has a debit balance to decrease the total revenue reported.
Learning Objectives
- Comprehend the attributes and the influence of sales returns and allowances on financial disclosures.
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