Which of the Following Statements Is Correct

question 115

Multiple Choice

Which of the following statements is correct?

• A)Revenue is recognized at the time of shipment when goods are shipped FOB destination.
• B)Sales returns and allowances are reported as operating expenses on an income statement.
• C)A seller records revenue when title and risks of ownership transfer to the buyer.
• D)Sales discounts are reported as cost of sales on an income statement.

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Definitions:

Intangible Assets

Non-physical assets owned by a business that have a useful life, such as patents, trademarks, and copyrights.

Capitalised

Expenses or costs that are added to the cost basis of a fixed asset on a company's balance sheet, rather than being expensed immediately.

Extrusion System

A process used in manufacturing to create objects of a fixed cross-sectional profile by pushing material through a die of the desired cross-section.

Financial Year

A one-year period that companies use for accounting purposes and preparation of financial statements, which may or may not align with the calendar year.