Which of the Following Is NOT a Component Which Enters

question 50

Multiple Choice

Which of the following is NOT a component which enters into the calculation of net sales?

• A)Gross sales
• B)Customer returns
• C)Promotional allowances
• D)Interest

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Definitions:

Non-Interest-Bearing Note

A promissory note with no interest charged on the principal; repaid at its face value at maturity.

Discount on Note Payable

The difference between the face value of a note payable and its issue price when the note is sold for less than its face value, effectively acting as an interest expense over time.

Interest Expense

Money that an entity has to pay over time for the privilege of borrowing funds.

Liquidity

The measure of a company's or individual's ability to meet short-term obligations without raising external capital, often reflected by the amount of cash or easily convertible assets.