Sales Allowances and Sales Discounts

question 32

Multiple Choice

Sales Allowances and Sales Discounts

• A) are both designed to encourage customers to pay their accounts promptly.
• B) are both contra revenue accounts to Sales.
• C) both have a normal credit balance.
• D) both have a normal debit balance and are therefore regarded as expense accounts.

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Definitions:

Class Action Suits

Legal actions in which a group of people collectively bring a claim to court or in which a class action is brought against a defendant.

Sarbanes-Oxley Act of 2002

A U.S. law passed in response to financial scandals to protect investors by improving the accuracy and reliability of corporate disclosures.

Securities and Exchange Commission

A U.S. federal agency responsible for regulating the securities industry, enforcing federal securities laws, and ensuring market integrity.

Registration Statement

A legal document submitted to regulatory authorities providing details about an investment offering for sale to the public, typically containing financial data, risks, and other significant information.