USA Customer credit and net income

[Tarboosh]

At the end of the tax year a credit for a regular customer remains on my small business LLC's books. Does this increase or decrease my company's net income? Thx

 

[kirby]

Depends on the entry that created the credit.
If customer paid you in advance, then entry was Dr cash and Cr customer account. So no effect on net income.
If a sale was reversed and entry was Dr Sales Cr customer account, then income was reduced.