For small business what does deducting returns, allowances and discounts mean? are these the business expenses?


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CRA says:   Enter your sales, commissions, and fees minus any GST/HST or PST, and any returns, allowances, and discounts, if these have been included in your sales.

Sales, Returns and Allowances:  A contra revenue account that reports 1) merchandise returned by a customer, and 2) the allowances granted to a customer because the seller shipped improper or defective merchandise. This of course will reduce the seller's accounts receivable and is subtracted from sales (along with sales discounts) to arrive at net sales.

THIS MEANS   If you have given a customer/client a discount during the year and have not adjusted (subtracted from)your sales figure to reflect this, you must do so here.  This figure will now subtracted from your sales.  Same goes for goods you may have sold and are recorded in your sales, that were actually returned to you.  Allowances are similar to discount, given to a customer if you made an error in what you shipped, or shipped them defective merchandise.

Hope this helps :-)

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