![]() ![]() The net balance of the two accounts shows the net value of the sales after discounts. The account is normally a debit balance and in use is offset against the revenue account which is normally a credit balance. The sales discounts contra revenue account records the discounts given to customers on sales made to them, normally a cash or settlement discount. The sales allowances account is similar in use to the sales returns account, except that it deals with allowances given against a defective product which the customer has kept and not returned to the business. Income statement extract showing contra revenue account Revenue ![]() In the trial balance the accounts would appear as follows. Using the two accounts, allows information about the original sale to be maintained on the revenue account, and details of the sale returns to be maintained on the sales returns contra revenue account. The net balance of the two accounts shows the net value of the sales made by the business for the accounting period. The sales returns contra sales account records the sales value of goods returned by a customer. Sales allowances contra revenue account.The contra revenue accounts list includes the following: When the two balances are offset against each other they show the net balance of both accounts.Ĭontra revenue accounts are useful when in bookkeeping terms a business needs to keep the two accounts separate so as not to lose information, but for presentation reasons in the financial statements, it is necessary to offset them against each other and show a net balance. ![]()
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