Sales discounts and allowances:
A)When properly recorded will reduce net profit.
B)When properly recorded will increase net profit.
C)Will not affect net profit.
D)Are always immaterial and need not be recorded.

Question

Quizplus · Accepted Answer

Sales discounts and allowances are considered contra-revenues, meaning they reduce gross revenue. As a result, they will also reduce net profit since net profit is calculated by subtracting expenses from gross revenue.

Sales Discounts and Allowances