No sales returns and allowances has debit balance as a normal balance because these accounts are contra to actual sales account and that's why account balance is reverse of actual sales account.
Sales Returns and Allowances
That is correct. Sales and returns allowances is what is called a "Contra" account because it exists to reduce the net balance of an account. Sales is a credit account, so you debit sales returns and allowances in order to reduce your net sales.
d. sales
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
No sales returns and allowances has debit balance as a normal balance because these accounts are contra to actual sales account and that's why account balance is reverse of actual sales account.
Sales Returns and Allowances
That is correct. Sales and returns allowances is what is called a "Contra" account because it exists to reduce the net balance of an account. Sales is a credit account, so you debit sales returns and allowances in order to reduce your net sales.
On the trial balance, Sales Returns and Allowances is a liability. If items returned are sold later, they become assets under sales.
d. sales
Sales Returns and Allowances are contra revenue accounts because they reduce that total amount of sales. [Sales-Sales returns and allowances=Net sales]. They are reported on the income statement.
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
An income account. Debit Returns & Allowances, Credit Cash.
Sales Returns and Allowances is a contra income account.
Sales returns and allowances is not a liability rather these are expenses or reduction in actual sales
Sales returns and allowances reduces the actual sales value that;s why shown as deduction from Sales Revenue in Income Statement
General Journal Sales Returns and Allowances - A company with sales returns and allowances can record them in the General Journal.