Which of the Following Is a True Statement

question 19

Multiple Choice

Which of the following is a true statement?

• A)Sales discounts is a contra-asset account.
• B)Sales returns & allowances is a contra-revenue account.
• C)Sales returns & allowances is a credit balance account.
• D)Sales discounts is a contra-account to inventory.

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Definitions:

Process Costing System

An accounting system used to assess the costs associated with each stage of the manufacturing process, especially applicable in industries producing homogenous products.

Work In Process

Partially completed goods that are still in the production process at the end of an accounting period.

Conversion Costs

The combination of direct labor and factory overhead costs.

Direct Labor

The workforce directly involved in manufacturing or producing goods, whose wages are considered a variable cost.