AnswerPls

Is sales return an expense?

Asked by Jean Swims on September 16, 2021

Categories: Business and finance Debt factoring and invoice discounting


Rating: 4.2/5 (58 votes)

If you give store credit for returns, your accounts payable will increase. The cost of goods sold includes all the expenses that go directly into your products. The cost of goods sold is a business expense. There is no contra account (like sales returns andallowances) when recording a return.

What type of account is cost of goods sold? The cost of goods-sold is the cost of the products that a retailer, distributor, or manufacturer has sold. The cost of goods-sold is reported on the income statement and should be viewed as an expense of the accounting period.

How do you Journalize cost of goods returned? Debit your returns and allowances account for the amount for which you sold the inventory. In most cases, the sales amount you charge customers is higher than the actual cost of the inventory. A debit is entered as a_negative figure, but the end result is an increase to your returns and allowances balance.

What is contra accounting? contra account definition. An account with a balance that is the opposite of the normal balance. For example, Accumulated Depreciation is a contra asset account, because its credit balance is contra to the debit balance for an asset account. Another example is the owner's drawingaccount.