Past Costs Themselves Are Always Irrelevant When Making Decisions

question 64

True/False

Past costs themselves are always irrelevant when making decisions.

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Definitions:

Net Sales

The revenue a company earns from its sales activities, minus the costs associated with returns, compensation for faulty or missing items, and permitted discounts.

Normal Credit Balance

The usual balance side of an account, considered a credit for liability, revenue, and equity accounts.

Sales Discounts

A reduction from the gross or total price of goods or services offered by the seller to the buyer under certain conditions.

Liquidity

A measure of how quickly and easily assets can be converted into cash without significant loss in value.