LO 6.1 Which of the following is an example of a contra revenue account?Choose one answer from the options below.A. salesB. merchandise inventoryC. sales discountsD. accounts payableBackNext

The correct answer is C. Sales Discounts.

Here's why:

A contra revenue account is an account that is deducted from a company's total revenue figures to arrive at its net revenue. It represents certain costs that the company incurs during a specific period but that are directly related to the revenue generated during that period.

Option A, Sales, is not a contra revenue account but rather a primary revenue account.

Option B, Merchandise Inventory, is an asset account, not a contra revenue account.

Option D, Accounts Payable, is a liability account, not a contra revenue account.

Therefore, option C, Sales Discounts, is the correct answer because it is a contra revenue account. Sales discounts are offered to customers to entice them to buy more products or services. Although they reduce the total revenue of the company, they are often necessary for competitive reasons or to move inventory more quickly.