On a Multiple-Step Income Statement, What Happens to the Amount

question 114

Multiple Choice

On a multiple-step income statement, what happens to the amount of sales returns and allowances?

• A) It is subtracted from net sales to determine gross margin on sales.
• B) It is subtracted from gross margin on sales to determine net sales.
• C) It is added in the calculation of cost of goods sold.
• D) It is subtracted from gross sales to determine net sales.

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Definitions:

Population

The total number of individuals or entities within a specified area or group which could be studied or observed.

Internal Validity

The characteristic of a study that allows us to conclude that the manipulation of the independent variable caused the observed changes in the dependent variable.

Independent Variable

The variable in an experiment that is manipulated by the researcher to examine its impact on the dependent variable.

Dependent Variable

In research, the variable being tested and measured, expected to change as a result of manipulations to the independent variable.