Which Is a Reason to Use the Net Method to Record

question 20

Multiple Choice

Which is a reason to use the net method to record purchase discounts?

• A)Cost-benefit factor is greater for the net method.
• B)Reporting "purchase discounts lost" signifies inefficient business practices.
• C)Given the materiality of the amounts involved,the net method is used.
• D)The net method is technically superior to the gross method.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, representing an average distance from the mean.

Mean

The average value obtained by adding all the data points in a set together and then dividing by the number of data points.

Standard Normal Curve

A symmetric bell-shaped curve that represents the distribution of many types of data where the mean is 0 and the standard deviation is 1.

Z-score

An index quantifying the position of a value relative to the average value in a dataset, expressed as the amount of standard deviations away from this mean.