Which of the Following Examples Would Have as Its Purpose

question 188

Multiple Choice

Which of the following examples would have as its purpose the allocation of costs to motivate employees?

• A) deciding on a selling g price for a product
• B) encouraging sales representatives to emphasize high-margin products
• C) to cost products a a "fair" price under a government contract
• D) to cost inventories for reporting to external parties

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Definitions:

Net Credit Sales

Sales made on credit minus returns and allowances, representing the actual sales revenue expected to be collected.

Allowance for Doubtful Accounts

A contra-account that reduces the total receivables on the balance sheet by an amount expected to be uncollectible.

Income Statement Approach

A method for determining certain balances that should appear on the income statement by considering revenues and expenses, rather than focusing directly on cash flow.