Discounts Which Reduce the Price for Customers Who Buy Items

question 74

Multiple Choice

Discounts which reduce the price for customers who buy items for resale or to produce other goods are

• A) purchase discounts.
• B) sale discounts.
• C) trade discounts.
• D) cash discounts.

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Definitions:

Depreciation

The systematic reduction of the recorded cost of a fixed asset over its useful life to reflect wear and tear or obsolescence.

Operating Cash Flow

The cash generated from normal operating activities of a business, reflecting its ability to generate sufficient cash to maintain operations.

Net Income

A company's overall income following the deduction of all expenditures and tax obligations from its total earnings.

Opportunity Costs

The loss of potential gain from other alternatives when one particular option is chosen over them.