Accounting word of the Week
Today, we are looking at the word sales allowance. Sales allowance is a reduction in the selling price of goods because of a particular problem. It can be due to a breakage, quality deficiency, and incorrect quantity of a merchandise.
Sales allowance is a deduction from gross sales to arrive at net sales. Sales allowances are recorded in the contra revenue account.
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Disclaimer: This blog is for information purposes only and is not intended to provide investing, accounting, tax or legal advice and should not be relied upon.