Question: 1. When recording a credit sale, what account do we debit? Describe where this account is reported in the financial statements.
2. What is the difference between a trade receivable and a nontrade receivable?
3. Explain the difference between a trade discount and a sales discount. Where are sales discounts reported in the income statement?
4. Briefly explain the accounting treatment for sales returns and allowances. Where are these accounts reported in the income statement?