If a Company Uses the Gross Method of Recording Accounts

question 58

Multiple Choice

If a company uses the gross method of recording accounts receivable, then cash discounts taken should be reported as

• A)a deduction from sales in the income statement.
• B)an item of "other expense" in the income statement.
• C)a deduction from accounts receivable in determining the net realizable value of accounts receivable.
• D)sales discounts forfeited in the cost of goods sold section of the income statement.

---

Definitions:

Environmental Justice

The fair treatment and meaningful involvement of all people, regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.

Corporate Welfare

Financial aid and benefits provided by the government to corporations, often criticized as favoritism towards big business.

Grassroots Environmentalism

Beginning in the 1980s, the fourth stage of the environmental movement; distinguished by the diversity of its members and belief in citizen participation in environmental decision making.

Conservation Era

The earliest stage of the environmental movement, which focused on the preservation of “wilderness” areas.