Sales returns and allowances are a Contra revenue account and are debited when goods are returned by customers for a refund.
The debit is to Sales Returns and Allowances (-SE) which will offset the original credit to Sales Revenue (+SE) for the returned goods.
Net Sales on the income statement equals the: (Sales Revenue - the Sales Returns and Allowances) a Contra Revenue account.
The Sales Returns and Allowances account reduces the Sales Revenue account on the income statement. It is a Contra-Revenue account as it increases on the debit side like an expense, however, it isn't always disclosed with selling and administrative expenses or the cost of Goods Sold expense.
Your question is incomplete. Please read below for the missing content.
Sales Returns & Allowances is a ____ account and is _____ when goods are returned by the customers for a refund.
liability; credited
contra-revenue; credited
revenue; credited
contra-revenue; debited
contra-asset; debited
contra-asset; credited
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