Final answer:
A contra revenue account is debited to record transactions like returns, allowances, or discounts.A contra revenue account is normally debited 4. because it represents revenue that is not earned and not received.
Step-by-step explanation:
A contra revenue account is normally debited because it represents revenue that is not earned and not received. This type of account is used to record returns, allowances, or discounts on goods or services that have been sold. For instance, if a customer returns a product, the sales returns and allowances account (a common contra revenue account) is debited. Similarly, if a discount is given after a sale, the sales discounts account is debited. These debits effectively reduce the total revenue reported on the income statement.
One common example of a contra revenue account is sales returns and allowances. When a customer returns a product or receives an allowance for a damaged or defective product, the revenue from the initial sale is reduced. By debiting the contra revenue account, the reduction in revenue is reflected.
Another example is sales discounts. When a customer receives a discount for prompt payment or a specific promotional offer, the revenue is reduced. Again, by debiting the contra revenue account, the reduction in revenue is captured.