The sales returns and allowances account is reported as a

A) contra-revenue account on the income statement
B) current liability on the balance sheet
C) deduction from accounts receivable on the balance sheet
D) selling expense on the income statement

Contra-Revenue Account

An account that is deducted from gross revenue to determine net revenue, such as sales returns, allowances, and discounts.

Income Statement

A financial statement that shows a company's financial performance, including revenues, expenses, and profits over a specific period.

Current Liability

Obligations or debts that a company must pay within a year from the date of the balance sheet.