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.

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Definitions:

Confederacy

Refers specifically to the Confederate States of America, a collection of eleven southern states that seceded from the United States in 1861, leading to the American Civil War.

Union

Referring to the Northern states during the American Civil War which were against the seceding Southern states forming the Confederacy.

Economies

The wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.

North

In the context of United States history, refers to the region opposed to the slavery-based economy of the South, particularly during the Civil War era.