Which One of the Following Statements Regarding Sales Discounts Is

question 77

Multiple Choice

Which one of the following statements regarding sales discounts is correct?

• A)If a company offers a discount to encourage prompt payment and the discount is taken,the discount reduces the amount of net sales.
• B)Credit terms of "2/10,n/30" means that if payment is made in two days,a 10% discount may be taken;if not paid within two days,the full invoice price will be due in thirty days.
• C)The terms "sales discounts" and "purchase discounts" are used interchangeably by a company.
• D)A sales discount is subtracted from Sales Revenue whereas a purchase discount is added to Cost of Goods Sold.