Sales discounts and sales returns, Accounting Basics

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Q. Sales discounts and Sales returns?

Sales discounts arise when the seller tenders the buyer a cash discount of 1 percent to 3 percent to induce early payment of an amount due.

Sales returns result from merchandise being returned by a buyer for the reason that the goods are considered unsatisfactory or have been damaged. A sales allowance is a subtraction from the original invoiced sales price granted to a customer when the customer keeps the merchandise but is dissatisfied.


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