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Co ntra Revenue Account or  Contra Income Account is the reversal of relevant Revenues / Incomes in Income Statement / Profit and Loss Account . Main types of Contra Revenue Accounts are Sales Returns, Sales Allowances and Sales Discount. 1. Sales Returns Contra Revenue Account It is the returning of goods sold by customer due to damaged goods or any other defective or any other reasons and causes to return the goods to seller. It is deducted from Total Sales in Income Statement. 2. Sales Allowances Contra Revenue Account It is the concession given by the seller to buyer in order induce the buyer to retain the goods at a lower standard price as goods are not so good as required by the buyer i.e., the goods has minor defects e.g. One Table Leg is not leveled to the surface but can be good for use in the office, etc. 3. Sales Discount Contra Revenue Account It is the promotion, discounts offers or spe...

Sales Discount is a  Contra Revenue Account    for the business because it reduces the Revenues   of the business, but, in fact, increases revenues  ( Sales )  later on because it generates huge Sales if successfully worked. But it is offered to customers in the forms of Promo Codes, Discount Coupon Code, Special Discount Offers to influence the customers to buy the goods at the cheapest prices and ultimately, sales will be increases that enhance the Net Income / Net Profit at the end. I n Accou nti ng, Sales Discou nt mea ns the co ncessio n give n by the seller to the buyer o n selli ng price, if the buyer makes payme nt before due date. But, it ca n also be give n whe n the seller offers differe nt packages for goods a nd services to buyers.   The seller ca n give Sales Discou nt to buyer due to Old customer or it is the policy of compa ny to offer Sales Discou nt to Customer at 50% Off or whatever promotio n, they wa nt ...