On a Multiple-Step Income Statement, What Happens to the Amount

question 49

Multiple Choice

On a multiple-step income statement, what happens to the amount of sales returns and allowances?

• A) It is subtracted from net sales to determine gross margin on sales.
• B) It is subtracted from gross sales to determine net sales.
• C) It is added in the calculation of cost of goods sold.
• D) It is subtracted from gross margin on sales to determine net sales.

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Definitions:

Obtained Value

The genuine result or value obtained by conducting a statistical test or experiment.

P Value

A statistical measure that helps scientists determine the significance of their research results, indicating the probability of obtaining an effect at least as extreme as the one in your sample data if the null hypothesis were true.

T Value

In hypothesis testing, it is the calculated value used to compare against a critical value to decide whether to reject the null hypothesis.

Variance

A numerical indicator that shows the distribution or variability of a dataset around its average value.