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Q. What is sales allowance?
A sales allowance is a inference from the original invoiced sales price granted when the customer keeps the merchandise but is dissatisfied for any of a number of reasons including damage, inferior quality or deterioration in transit. When a seller agrees to the sales return or else sales allowance the seller sends the buyer a credit memorandum indicating a reduction (crediting) of the buyer's account receivable. The credit memorandum is a document that provides space for the name and address of the concerned parties followed by a space for the reason for the credit and the amount to be credited. A credit memorandum becomes the foundation for recording a sales return or a sales allowance.
10,000 dollar loan at a Maturity of 3 months, an 8% interest rate
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