A Company Reports Revenue on Its Income Statement Using

question 30

Multiple Choice

A company reports revenue on its income statement using

• A)gross sales less sales returns and allowances.
• B)net sales less sales returns and allowances.
• C)gross sales plus trade discounts.
• D)net sales plus trade discounts.
• E)gross sales less trade discounts plus sales returns and allowances.

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Definitions:

Extraordinary Repairs

Major repairs or expenditures that significantly prolong the useful life of an asset, beyond normal maintenance.

Annual Depreciation

The amount of an asset's cost allocated as an expense each year over its useful life, reflecting wear and tear or obsolescence.

Original Cost

The amount initially paid for an asset, not accounting for depreciation, inflation, or market value adjustments.

Short-Term Note

A debt instrument with a maturity of less than one year, used by companies to finance short-term obligations.