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Sales returns and allowances is not a liability rather these are expenses or reduction in actual sales
debit
purchase return is assets or liability or expense
A contra purchase account
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
Sales returns and allowances is not a liability rather these are expenses or reduction in actual sales
Sales returns and allowances is not a liability rather these are expenses or reduction in actual sales
debit
On the trial balance, Sales Returns and Allowances is a liability. If items returned are sold later, they become assets under sales.
purchase return is assets or liability or expense
A contra purchase account
An income account. Debit Returns & Allowances, Credit Cash.
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
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.
To calculate the net delivered cost of purchase, one would add purchases and freight in and then deduct purchase returns & allowances and then deduct purchase discounts.
Sales Returns and Allowances is a contra income account.
Sales Returns and Allowances