Target Vendor Chargebacks and Deductions: How to Book Them and How They're Taxed
Target often pays vendors the invoice total minus deductions. Book revenue at the gross invoice; allowances and promotions reduce revenue (Form 1120, line 1b), compliance chargebacks and ad fees are expenses, and disputed items sit in a receivable while you dispute on time. Contractual chargebacks aren't government fines and are generally deductible.
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