If a Company Employs the Gross Method of Recording Accounts

question 43

Multiple Choice

If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as ________.

• A) sales discounts forfeited on the income statement
• B) an item of "other income and expense" on the income statement
• C) an increase to sales revenue on the income statement
• D) a deduction from sales revenue on the income statement

---

Definitions:

Selection Bias

A distortion in a statistical analysis resulting from the method of collecting samples, where some members of the intended population are less likely to be included than others.

Natural Groups

Groups that exist in the real world as they are, without manipulation or creation for research purposes, such as ethnic or gender groups.

Two Groups

A research design involving comparison between two separate groups of participants to determine the effect of a variable.

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.