Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 43 - No. 5)
What is a contra-revenue account, and how does it relate to sales returns?
An account that increases revenue. Sales Returns and Allowances is a contra-revenue account.
An account that reduces revenue. Sales Returns and Allowances is a contra-revenue account.
An account that has no impact on revenue. Sales Returns and Allowances is not a contra-revenue account.
An asset account. Sales Returns and Allowances is an asset account.
Explanation
A contra-revenue account is used to reduce revenue. Sales Returns and Allowances reduces sales revenue.
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