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.