Question

Sales Discounts is a contra-revenue account that typically has a credit balance before closing entries at the end of an accounting period.

A.True
B.False

Answer 1

Sales Discounts is a contra-revenue account that typically has a credit balance before closing entries at the end of an accounting period.

Step-by-step explanation:

Sales Discounts is a contra-revenue account that typically has a credit balance before closing entries at the end of an accounting period.

A contra-revenue account is an account that is subtracted from the revenue account on the income statement. It is used to show the amount of discounts given to customers, which reduces the overall revenue.

For example, if a company sells products for $1,000 but offers a 10% discount, the Sales Discounts account would show $100 and reduce the revenue to $900.