Regarding the New Revenue Recognition Standards,which of the Following Statement

question 153

Multiple Choice

Regarding the new revenue recognition standards,which of the following statement is correct?

• A)The gross method should be used only if the seller does not expect to collect from the customer within the discount period
• B)Under the gross method,Sales Discounts Forfeited is credited when customers do not pay within the discount period.
• C)Under the net method,Sales Discounts are debited when customers pay within the discount period.
• D)The gross method should be used if the seller expects to collect from the customer within the discount period.

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Definitions:

Minimum Cash Balance

The smallest amount of cash that a company aims to hold in its cash account to meet operational needs.

Cash Deficiency

A situation where the cash available is not sufficient to cover the expenses or liabilities; often results in the need for additional financing or budget adjustments.

Production Budget

A plan that outlines the number of units that must be produced within a period to meet the expected sales and inventory levels.

Units Produced

Units produced quantify the number of complete units manufactured or produced during a specific time frame in a production process.