A Sales Discount Does Not

question 157

Multiple Choice

A sales discount does not

• A)provide the purchaser with a cash saving.
• B)reduce the amount of cash received from a credit sale.
• C)increase a contra revenue account.
• D)increase an operating expense account.

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Definitions:

Stock Split

A stock split is a corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, while the market capitalization remains unchanged.

Retained Earnings

The portion of net income not distributed to shareholders as dividends and instead reinvested in the business.

Stable Dividend Policy

A strategy where a company aims to distribute a consistently fixed dividend to shareholders, regardless of the year-to-year fluctuations in earnings.

Earnings Projections

Forecasts of a company's future earnings, often based on past performance, current trends, and industry analysis.