Which of the Following Accounts Has a Normal Credit Balance

question 6

Multiple Choice

Which of the following accounts has a normal credit balance?

• A) Purchases
• B) Sales Returns and Allowances
• C) Freight-In
• D) Purchase Discounts

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Definitions:

Law of Small Numbers

A cognitive bias that leads people to make unjustified conclusions based on limited data.

Risks

The potential for losing something of value, or the uncertainty regarding the outcome of an action or decision.

Probability

The likelihood or chance of an event occurring, often expressed as a number between 0 and 1.

Small-Numbers Bias

A situation in markets where the fewness of buyers or sellers can significantly impact the negotiation power and market outcomes.