Answered: Many companies use contra-revenue…

Many companies use contra-revenue accounts to describe a reduction in Service Revenue (also Sales Revenue). These accounts include Sales Discount, Sales Allowance, and Sales Returns.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Many companies use contra-revenue accounts to describe a reduction in Service Revenue (also Sales Revenue).
These accounts include Sales Discount, Sales Allowance, and Sales Returns.
How would managers use this information to improve operations?

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