for the readers, contra accounts keep track of expected adjustments, particularly "opposites", So when you sell items you also expect a percentage to be returned later by dissatisfied customers. If you book all sales revenues as they occur, that will show an "untrue" number, so you book expected returns into a contra account so you can see what your actual revenues are expected to be. Then later when you have accurate information on returns you use those values to unwind the expected values you put in.
Accounting is all about providing accurate information to various "stakeholders" who might be looking at the books.
for the readers, contra accounts keep track of expected adjustments, particularly "opposites", So when you sell items you also expect a percentage to be returned later by dissatisfied customers. If you book all sales revenues as they occur, that will show an "untrue" number, so you book expected returns into a contra account so you can see what your actual revenues are expected to be. Then later when you have accurate information on returns you use those values to unwind the expected values you put in.
Accounting is all about providing accurate information to various "stakeholders" who might be looking at the books.