Which of the Following Would Appear on the Income Statement

question 28

Multiple Choice

Which of the following would appear on the income statement of a company that uses the periodic inventory method,but would NOT appear on the income statement of a company that uses the perpetual inventory method?

• A) Net sales
• B) Cost of goods sold
• C) Cost of goods available for sale
• D) Insurance expenses

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Definitions:

Allowance Account

An account used in accounting to record reductions in the value of receivables, such as allowances for doubtful accounts.

Direct Write-Off Method

An accounting practice where uncollectible debts are charged against income at the time they are determined to be uncollectable, rather than provisioned for in advance.

Direct Write-Off Method

An accounting practice where specific bad debts are written off against income at the time they are deemed to be uncollectable.

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a set of rules, standards, and procedures established for accounting and financial reporting, aimed at ensuring consistency and transparency.