Which of the following accounts is always treated as a contra revenue and not as a selling expense?
A) Net sales
B) Cash equivalents
C) Sales returns and allowances
D) Purchase returns and allowances

Question

Quizplus · Accepted Answer

Sales returns and allowances are considered a contra revenue account because they directly reduce the total revenue from sales on the income statement, rather than being listed as an expense.

Which of the Following Accounts Is Always Treated as a Contra