Contra Account What Is It, List, Examples, Vs Adjunct Account
Examples of revenue contra accounts are Sales Discounts, Returns and Allowances. For instance, when a company records a rebate in a contra expense account, the net expense reported on the income statement is reduced. This reduction can lead to a more favorable view of the company’s profitability, as it shows that the company is effectively managing its costs. Additionally, the use of contra expense accounts can impact key financial ratios, such as the operating margin and https://follishi...