The Sales Returns and Allowances account balance should be deducted from the Sales account balance when computing net sales.
BT: Knowledge

Question

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This is because sales returns and allowances are considered as deductions from the total sales amount, and only the net sales amount (total sales minus returns and allowances) is actually earned by the company. Therefore, it is necessary to deduct the Sales Returns and Allowances account balance from the Sales account balance when computing net sales.

The Sales Returns and Allowances Account Balance Should Be Deducted