A Disadvantage of Using the Gross Price Method to Account

question 57

Multiple Choice

A disadvantage of using the gross price method to account for cash discounts extended by the seller to its customer is that

• A)the method reports accounts receivable at the net realizable value
• B)the method overstates the current sales and the accounts receivable at the end of the period
• C)the method requires more bookkeeping than the net price method
• D)the method enables sales returns and allowances to be recorded at gross instead of net amounts

Analyze communication networks and decision-making methods in group contexts.

Understand the principles and legal framework of Alternative Dispute Resolution (ADR) including arbitration and mediation.

Recognize the advantages and disadvantages of ADR over traditional litigation.

Identify the circumstances under which arbitration is preferred and its enforceability within legal and contractual contexts.

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Definitions:

Assigned

The process of transferring rights, duties, or properties to another party, often seen in contracts or legal agreements.

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing in order to be enforceable.

Contracts

Legally binding agreements between two or more parties that establish obligations which are enforceable by law.

Intended Beneficiary

An intended beneficiary is a person or entity that a contract explicitly states will benefit from its execution or terms.