MANAGEMENT

Detailed explanation-1: -In this case, the seller can simply record the sales discounts as they occur, with a credit to the accounts receivable account for the amount of the discount taken and a debit to the sales discount account. The sales discount account is a contra revenue account, which means that it reduces total revenues.

Detailed explanation-2: -The correct answer is false. The sales returns and allowances and the Sales discount are not expense accounts, but both contra-revenue account, which would reduce the revenue account to calculate for net revenue. Thus, the statement is false.

Detailed explanation-3: -Examples of Contra Revenue Accounts The contra revenue accounts list includes the following: Sales returns contra revenue account. Sales allowances contra revenue account. Sales discounts contra revenue account.

Detailed explanation-4: -Contra Revenue Account Sales returns, sales allowance and sale discounts are different examples of contra revenue accounts. Contra accounts such as these have a debit balance and are deducted from the total amount of a company’s revenue.