What Is the Correct Classification of the Account: Discount on Notes

question 132

Multiple Choice

What is the correct classification of the account: Discount on Notes Payable?

• A) a revenue
• B) a contra liability
• C) an asset
• D) an expense

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales, including expenses like rent, salaries, and insurance.

Variable Cost

Expenses that change in proportion with production output or sales, such as materials and labor.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments, wages, and coverage fees.

Selling Price

The amount for which a good or service is sold, determining the revenue generated from sales activities.