Yes, sales returns does appear in the income statement:
Revenues:
Sales 250,000
less Sales returns 25,000
Purchase return is a contra account because it reduces the balance in the Purchase account in an attempt to determine cost of goods sold. This is like sales returns and allowances being used to determine net sales on an entity's income statement.
Sales return is reduction in sales as customer returns goods for any reason and it is not expense.
Rate of Return on Net Sales = (Net Income) / (Total Sales)
sales+sales return=net sales
return on sales
Sales Returns and Allowances is a contra income account.
--> another term for Statement of Earnings is Income Statement --> in income statement, you deduct the Sales Return & Allowances from the Gross Sales to come up with Net Sales --> in presentation purposes, usually it is only the Net Sales account that is shown
[Debit] Sales Return account [Credit] Cash account
Purchase return is a contra account because it reduces the balance in the Purchase account in an attempt to determine cost of goods sold. This is like sales returns and allowances being used to determine net sales on an entity's income statement.
Sales return is reduction in sales as customer returns goods for any reason and it is not expense.
[Debit] Sales return [Credit] Cash /bank [Debit] Sales [Credit] Sales return
Rate of Return on Net Sales = (Net Income) / (Total Sales)
Return on sales = 814100 / 9275000 = 8.777 %
sales+sales return=net sales
return on sales
If sales goods returned: [Debit] Sales account xxxx [Credit] Sales Return account xxxx if purchase goods returned: [Debit] Purchase return xxxx [Credit] Purchases account xxxx
When you accrue income, the debit is to a receivable account such as Accounts Receivable and the credit goes to the appropriate income account, such as Sales.