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The sales discount account is a contra-account to Sales. True False

Question:

The sales discount account is a contra-account to Sales.

True

False

Contra Accounts:

In accounting, contra accounts are accounts that are used to record transactions, but that will not appear on the financial statements, as their balances will be set-off against their "main " account.

Answer and Explanation:


The statement is true.

Other sales contra accounts are sales allowances and sales returns. The balances of these accounts are deducted from the balance of the gross sales revenue account to arrive at net sales presented in the income statement.


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How to Calculate Sales Revenue: Definition & Formula

from Financial Accounting: Help and Review

Chapter 5 / Lesson 27
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