Sales Returns & Allowances Is a ______ Account and Is

question 201

Multiple Choice

Sales Returns & Allowances is a ______ account and is ______ when goods are returned by customers for a refund.

• A) contra-asset; debited
• B) contra-revenue; credited
• C) contra-revenue; debited
• D) contra-asset; credited

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Definitions:

Adjusting Entry

An accounting record made to update the book balances to reflect the true financial status before preparing financial statements.

Biweekly Salaries

A payment schedule for employees where wages are paid every two weeks, resulting in 26 pay periods in a year.

Adjusting Entry

An update to the books of accounts to allocate incomes and expenses to the appropriate accounting period.

Fiscal Period

Refers to any period used for accounting purposes, typically a year, which can either align with the calendar year or be a different 12-month period.