If a Company Employs the Net Method of Recording Accounts

question 54

Multiple Choice

If a company employs the net method of recording accounts receivable from customers,then sales discounts forfeited should be reported as ________.

• A)sales discounts forfeited on the income statement
• B)an item of "other income and expense" on the income statement
• C)an increase to sales revenue on the income statement
• D)a deduction from sales revenue on the income statement

---

Definitions:

Labor

Human work, encompassing both physical and mental tasks, dedicated to the manufacturing of goods and services.

Output

The amount of goods or services produced by a company, industry, or country over a certain period.

Cost

The amount of money, time, or resources required to produce or acquire goods or services.

Units

Basic quantities or measurements, often in the context of goods produced, sold, or consumed.