When a Supplier Makes a Downward Adjustment in the Amount

question 26

Multiple Choice

When a supplier makes a downward adjustment in the amount owed by a creditor, the creditor will:

• A)reduce the amount of the account payable to the supplier, and decrease an asset such as inventory.
• B)increase the amount of the account payable to the supplier, and decrease an asset such as inventory.
• C)reduce the amount of the account payable to the supplier, and increase cash.
• D)reduce the amount of the account payable to the supplier, and decrease cash.

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Definitions:

Normal Distribution

A bell-shaped frequency distribution curve that is symmetric around its mean, describing how values of a variable are dispersed or spread.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, showing how much each value in the set varies from the mean.

Mean

The average of a set of numbers, calculated by adding all the numbers together and dividing by the count of numbers.

Annual Revenue

The total income generated by a company or organization in one fiscal year before any deductions are made.