Identify the statement below that correctly describes the Sales Returns and Allowances account.
A) It is an expense account.
B) It is a liability account.
C) It normally has a credit balance.
D) It normally has a debit balance.

Question

Quizplus · Accepted Answer

The Sales Returns and Allowances account is a contra revenue account, meaning it is used to reduce sales revenue. Since it is a contra account, it has a normal debit balance.

Identify the Statement Below That Correctly Describes the Sales Returns