An Expense Resulting from Failing to Take Advantage of Cash

question 50

Multiple Choice

An expense resulting from failing to take advantage of cash discounts on purchases is called:

• A) Sales discounts.
• B) Trade discounts.
• C) Purchases discounts.
• D) Discounts lost.
• E) Discounts earned.

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Insurance Expense

The cost associated with purchasing insurance to protect against various risks, recorded as an expense.

Unearned Revenue

Money received by a company for goods or services yet to be provided. It is considered a liability until the service is delivered or the product is provided.

Investments

Assets purchased with the aim of generating income or appreciation, including securities, real estate, and other financial assets.