What is the Difference Between A Sales Return And A Sales Allowance?

A Sales Return is the returning of the goods by the buyer to the seller due to defective goods, unsatisfactory conditions, damaging goods or any other valid reasons while A Sales Allowance is the reduction of selling price granted by the seller to buyer so that the buyer retains the goods that are below standard quality.

For Example, if Mr. A sold 5 Fans to Mr. B. On the receipt of Fans, One Fan is damaged, then Mr. B sends a debit note to Mr. A informing about the damaging of one Fan and returning of it by debiting seller account in his (Mr. B) books of account. This is a Sales Return. Again, if the damage done to One Fan is minor, then the seller (Mr. A) request the buyer (Mr. B) to retain the fan and offers him reduction in selling price. Then, if Mr. B accepts this offer, then, he retains the fan because of lower in purchase price. This is a Sales Allowance.