The Sales Returns and Allowances account is presented
A)on the income statement as an addition to Sales.
B)on the income statement as a deduction from Sales.
C)on the balance sheet as a deduction from Capital.
D)on the balance sheet as a deduction from Accounts Receivable.

Question

Quizplus · Accepted Answer

The Sales Returns and Allowances account is a contra-revenue account and is presented on the income statement as a deduction from Sales. It is used to reduce the amount of revenue reported when goods or services are returned or allowances are granted to customers.

The Sales Returns and Allowances Account Is Presented