To Determine How Much Merchandise a Company Has Returned to Its

question 22

Multiple Choice

To determine how much merchandise a company has returned to its vendors,it should review the:

• A)Purchases Returns & Allowances account.
• B)Purchases Discount account.
• C)Sales Returns & Allowances account.
• D)Sales Discounts account.

Understand the benefits of decentralization on managerial performance and motivation.

Understand the concept of return on investment (ROI) and its calculation.

Identify and calculate the minimum required rate of return.

Analyze performance measurements, including margin and turnover.

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Definitions:

Common Stock

Shares representing ownership in a company, entitling holders to vote at shareholder meetings and receive dividends.

Net Income

The conclusive earnings a company retains after all operational costs and taxes are taken away from the revenues.

Statement of Cash Flows

A financial document that provides a summary of the cash inflows and outflows for a company over a specific period of time, showing how it raises and spends money.

Operating Activity

Business actions involving the day-to-day operations that generate revenue and incur expenses in the production of goods or services.