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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 9DQ: Explain why rewarding sales personnel on the basis of total sales might not be in the best interests...

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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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