If a Company Uses the Gross Method of Recording Accounts

question 449

Multiple Choice

If a company uses the gross method of recording accounts receivable, then cash discounts taken should be reported as

• A)a deduction from sales in the income statement.
• B)an item of "other expense" in the income statement.
• C)a deduction from accounts receivable in determining the net realizable value of accounts
• Receivable.
• D)sales discounts forfeited in the cost of goods sold section of the income statement.

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Definitions:

Caring

Exhibiting kindness and concern for others, often regarded as a crucial element in healthy interpersonal relationships and communities.

Motivational Interviewing

A counseling approach that helps individuals resolve ambivalent feelings and insecurities to find the internal motivation needed for change.

Resistance

In psychotherapy, it refers to the patient's unconscious defense mechanisms that block the progress of therapy.

Defensiveness

A psychological reaction characterized by a refusal to accept criticism or the suggestion of fault, often as a mechanism to protect one's ego.