Which Type of Account Is Cost of Goods Sold

question 48

Multiple Choice

Which type of account is Cost of Goods Sold?

• A)An asset account.
• B)A liability account.
• C)An expense account.
• D)An income account.

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Definitions:

Sales Returns

Transactions in which customers return goods previously purchased and receive a refund or credit.

Accounts Receivable

Customers' outstanding dues to a company for previously furnished goods or services.

Credit Terms

The conditions under which credit will be extended to a customer, including the repayment time frame and any interest or discounts.

Net Allowance

The remaining balance after adjustments are made for discounts, returns, or bad debts to the gross receivables or revenue.