Which of the Following Describes Sales Returns and Allowances

question 23

Multiple Choice

Which of the following describes Sales Returns and Allowances?

• A) A revenue account with a normal credit balance.
• B) An expense account with a normal debit balance.
• C) A contra revenue account with a normal debit balance.
• D) A contra expense account with a normal credit balance.

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Definitions:

Total Assets

Refers to the sum of everything of value owned by a business, including cash, securities, receivables, inventories, and fixed assets.

Sources of Cash

Various origins from which a business or individual receives money, including operations, financing, and investing activities.

Accounts Payable

Money owed by a company to its creditors or suppliers for products or services that have been delivered but not yet paid for.

Fixed Assets

These are long-term tangible assets that a firm owns and uses in its operations to generate income, such as buildings, machinery, and equipment, which are not expected to be consumed or converted into cash within a year.