If Sales Discounts Are Shown as a Separate Item in Financial

question 27

Multiple Choice

If sales discounts are shown as a separate item in financial statements,they should be shown as a(n) :

• A)Deduction from accounts receivable.
• B)Deduction from gross sales revenue.
• C)Operating expense.
• D)Current liability.

---

Definitions:

Residual Value

The estimated salvage value of an asset at the end of its useful life, used in calculating depreciation expense.

Depreciation Expense

Depreciation Expense represents the systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Accumulated Depreciation

Represents the total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its decrease in value over time.

Depreciation Expense

The method by which the cost of a tangible or physical asset is allocated over its useful life.