Net Sales equals Gross Sales - Sales Returns and Allowances - Cash Sales. 54) If manageme

Net Sales equals Gross Sales - Sales Returns and Allowances - Cash Sales. 54) If manageme

Net Sales equals Gross Sales - Sales Returns and Allowances - Cash Sales.

 

54) If management wanted to determine if customers were returning goods at a higher rate than usual it could use the Sales Returns and Allowances account to analyze the information.

 

55) The time a customer is granted to pay the bill is the discount period.

 

56) Terms of 2/10, n/30 means that a customer is allowed a 10% discount in 30 days.

57) Sales Returns and Allowances is a contra-asset.

 

58) Sales is a revenue account.

 

59) Sales Discounts is an expense account.

 

60) If a customer returns merchandise the income for that period will be reduced.

 

61) The Sales Returns and Allowances account is contra-revenue.

 

62) Sales Discounts and Sales Returns and Allowances are expense accounts.