Which of the Following Statements Is Correct

question 20

Multiple Choice

Which of the following statements is correct?

• A)Revenue is recognized at the time of shipment when goods are shipped FOB destination.
• B)Sales returns and allowances are reported as operating expenses on an income statement.
• C)Revenue is recorded when title and risks of ownership transfer to the buyer.
• D)Sales discounts are reported as operating expenses on an income statement.

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Definitions:

Perfectly Competitive

A market structure characterized by a complete absence of rivalry among the sellers and it implies an industry or market in which many sellers offer identical products.

Benchmark Pricing

A method of pricing where a standard or reference price is used to set or compare the price of goods and services.

Similar Products

Goods that serve comparable purposes or needs and can be considered substitutes for each other by consumers.

Short Run

A period in economics during which at least one factor of production is fixed, limiting the ability of the economy or firm to adjust.