Which of the Following Is Not a Cost That Normally

question 34

Multiple Choice

Which of the following is not a cost that normally needs to be estimated for revenue to be recognized?

• A)Bad debt expense
• B)Cost of goods sold
• C)Warranty expense
• D)Cost of returns

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Definitions:

Note Receivable

A written promise for a specified amount of money to be paid by a debtor at a certain future date.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, excluding any interest or profits.

Interest

A payment made for the use of borrowed money, usually calculated as a percentage of the principal amount.

Note Receivable

A written promise for amounts to be received by a debtor, where the debtor agrees to pay back the amount, often with interest, by a specified date.