An Account Used to Calculate Gross Profit on Trading, Prior

question 5

Multiple Choice

An account used to calculate gross profit on trading, prior to the profit and loss account is a/an ________ account.

• A)cost of sales
• B)inventory
• C)contra
• D)trading

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Definitions:

Long-Term Debt

Borrowings that are due for repayment more than one year from the borrowing date, often used for significant investments.

Short-Term Debt

Loans or borrowings that are due for repayment within a short timeframe, typically within one year, used for immediate financing needs.

Retained Earnings

The portion of net income not distributed as dividends to shareholders, but retained by the company for reinvestment.

MACRS 3-Year Class

A category under the Modified Accelerated Cost Recovery System (MACRS) for depreciating certain types of business property over three years.