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| Topic: |
Business
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| Number of pages / Number of words: |
9 / 2404 |
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Adjusting entries can be classified to either prepayments or accruals. The adjusting entries for accruals are required in order to record revenues and expenses in the current according period that have not been recognized. Adjusting entries for prepayment are required at balance date to record this portion of the payment that represents the expense or revenue in the current accounting period...
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This contra revenue account has a normal balance of debit. This account is not an expense because a customer only returns goods and he is given refund or credit note. This account is used only to separately identifying in the accounts and in the income statement, the amount of sales returns and allowances...
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