Which of the Following Is an Advantage of Using the Net

question 79

Multiple Choice

Which of the following is an advantage of using the net price method for recording cash discounts on credit sales?

• A)It eases communication with customers about their balances.
• B)It properly reflects current period sales revenue.
• C)It simplifies recording of sales returns and allowances.
• D)It requires less record keeping than the gross method.

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Definitions:

Fixed Utilities

Charges for basic services like electricity, water, and gas that do not fluctuate greatly with usage levels, often considered part of an organization's fixed overhead.

Flexible Budget

A budget that changes in response to variations in activity levels or volume.

Variable Budget

A financial plan that adjusts for changes in the volume of activity, allowing for flexibility in spending.

Budgeted Production

Budgeted Production involves estimating the quantity of goods or services that a company plans to produce over a specific period as part of its operational and financial planning efforts.