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.
a debit and credit
True
A contra purchase account
It is a contra asset account; thus, an ASSET
When a seller records a return of goods, the account that is credited is typically "Sales Returns and Allowances." This account is a contra-revenue account that reduces the total sales revenue reported on the income statement. Additionally, the inventory account may be debited to reflect the return of goods to stock.
a debit and credit
a debit and credit
a debit and credit
true
True
A contra purchase account
It is a contra asset account; thus, an ASSET
Sales Returns and Allowances is a contra income account.
is accumulated depreciation a contra account
Sales discount is not an expense account, but is also a deduction to an income statement. It is just a contra account of a revenue account particularly a sales revenue account.
When a seller records a return of goods, the account that is credited is typically "Sales Returns and Allowances." This account is a contra-revenue account that reduces the total sales revenue reported on the income statement. Additionally, the inventory account may be debited to reflect the return of goods to stock.
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