Which of the Following Accounts Has a Normal Credit Balance

question 17

Multiple Choice

Which of the following accounts has a normal credit balance?

• A)Purchases
• B)Freight Out
• C)Freight In
• D)Purchase Discounts

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Definitions:

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales by comparing net income and net sales.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue; the ratio of the cost of goods sold to the average inventory.

Managerial Efficiency

The effectiveness with which managers utilize resources and make decisions to achieve the organization's goals.

Investments In Assets

Financial activities involving the purchase of assets with the expectation that they will generate income or appreciate in the future.