Which of the Following Is an Advantage of Using the Net

question 79

Multiple Choice

Which of the following is an advantage of using the net price method for recording cash discounts on credit sales?

• A)It eases communication with customers about their balances.
• B)It properly reflects current period sales revenue.
• C)It simplifies recording of sales returns and allowances.
• D)It requires less record keeping than the gross method.

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Definitions:

Partners

Individuals or entities engaged in business together under a formal agreement to share profits and losses.

Co-own

To have joint ownership or share the possession of a property or item with one or more parties.

Voluntary Association

An organization created by individuals who voluntarily unite to pursue a common interest or goal without necessarily seeking profit.

Business Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs associated with sustaining the business operations.