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:

Fallacy

Incorrect reasoning in argumentation resulting from a misconception or distortion of a logical argument.

Objectivity

The state or quality of being unbiased, unprejudiced, and not influenced by personal feelings or opinions.

Appeal To Majority

The fallacy of using the fact that large numbers of people believe a proposition to be true as evidence of its truth.

Fallacy

An error in reasoning that renders an argument invalid or unsound, often due to a misleading or flawed premise.