Which of the Following Statements Is Correct

question 115

Multiple Choice

Which of the following statements is correct?

• A)Revenue is recognized at the time of shipment when goods are shipped FOB destination.
• B)Sales returns and allowances are reported as operating expenses on an income statement.
• C)A seller records revenue when title and risks of ownership transfer to the buyer.
• D)Sales discounts are reported as cost of sales on an income statement.

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Definitions:

Manufacturing Overhead

The indirect costs of production, such as utilities and maintenance, that are not directly tied to specific products.

Units Produced

The total number of units of product completed by a manufacturing process in a specific period.

Manufacturing Overhead

Indirect costs associated with manufacturing, including utilities, depreciation, and salaries of non-direct labor, that are not directly traceable to specific units of product.

Units Produced

The total number of complete products that a manufacturing facility has finished producing during a specified period.