Sales Allowances and Sales Discounts
A) are both designed to encourage customers to pay their accounts promptly.
B) are both contra revenue accounts to Sales.
C) both have a normal credit balance.
D) both have a normal debit balance and are therefore regarded as expense accounts.

Question

Quizplus · Accepted Answer

Sales Allowances and Sales Discounts are both contra revenue accounts, meaning they reduce the total revenue reported on the income statement. They have a normal debit balance, which is opposite to the normal credit balance of revenue accounts.