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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Describe how each of the following accounts is used: (1) Sales, (2) Sales Tax Payable, (3) Sales Returns and Allowances, (4) Customer Refunds Payable, and (5) Sales Discounts.

To determine

Indicate the use of the given accounts.

Explanation

Account: A record which documents or records the changes in assets, liabilities, or equity for a particular period is referred to as an account.

Use of the accounts:

  1. 1. Sales account: Sales account is a revenue account that records the sales revenue amount. This has a credit balance.
  2. 2. Sales Tax Payable: Sales Tax Payable account is a liability account that records the amount of tax imposed on the sales generated. This has a credit balance.
  3. 3. Sales Returns and Allowances: Sales Returns and Allowance account is a contra-revenue account that records the amount reduced for the goods returned and amount reduced on sale of defective goods...

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