How Are Purchase Discounts and Purchase Returns Recorded by a Company

question 113

Multiple Choice

How are purchase discounts and purchase returns recorded by a company using the periodic inventory system?

• A) As a direct reduction to the Purchases account
• B) As miscellaneous expenses
• C) In contra accounts to the Purchases account
• D) As operating expenses

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Definitions:

Misdemeanors

Lesser criminal acts that are punishable by fines or imprisonment for a short period, not in a high-security facility.

Criminal Law

The body of law that relates to crime and the regulation of social conduct by defining offenses and setting penalties for those who violate laws.

Felonies

Serious crimes usually punishable by imprisonment for more than one year or by death.

Preponderance Of The Evidence

A standard of proof in civil cases that means the greater weight of the evidence must favor the party seeking to meet the burden of proof.