When a Company Collects from a Customer Who Pays Within

question 18

Multiple Choice

When a company collects from a customer who pays within the discount period,the discount:

• A)is a reduction in the initial sales revenue.
• B)is an addition to the cost of goods sold.
• C)is a reduction to the inventory account.
• D)is an addition to the sales returns and allowances account.

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Definitions:

Statement of Revenues

A financial document outlining the sources and amounts of a company's or government's income over a specific period.

General Fund

The primary operating fund of a governmental entity, accounting for all financial resources except those required to be accounted for in another fund.

Governmental Fund Financial Statements

Financial reports that detail the financial position and results of operations for the government funds, embracing a diverse range of governmental activities and services.

Fund Financial Statements

Financial reports that detail the income, expenditures, and other financial activities of a particular fund within an organization.