The Sales Returns and Allowances Account Is Reported as a

question 55

Multiple Choice

The sales returns and allowances account is reported as a

• A)contra-revenue account on the income statement
• B)current liability on the balance sheet
• C)deduction from accounts receivable on the balance sheet
• D)selling expense on the income statement

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Definitions:

Trial Balance

A report that lists all the accounts and their balances at a particular time, used to verify that total debits equal total credits in the double-entry accounting system.

T-Account

A simplified account structure used for teaching and visualizing debits and credits, consisting of a title across the top and a left (debit) and right (credit) side.

Net Income

The residual income of a company after all expenses have been deducted from revenues.

Accounts

Financial records that track the financial transactions and positions of a business, including assets, liabilities, revenue, and expenses.