A Characteristic of Purchases Returns and Allowances Is

question 114

Multiple Choice

A characteristic of Purchases Returns and Allowances is:

• A)it has a normal credit balance.
• B)it increases when merchandise is returned.
• C)it decreases cost.
• D)All of the above are correct.

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Definitions:

Profits

The financial gain realized when the revenue earned from business activities exceeds the expenses, costs, and taxes needed to sustain those activities.

Output

The quantity of goods or services produced by a business, industry, or economy within a specific period.

Shutting Down

A short-run decision by a firm to cease production temporarily due to unfavorable market conditions.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.