Debt Service Funds Use the Same Measurement Focus and Basis

question 135

Multiple Choice

Debt service funds use the same measurement focus and basis of accounting as:

• A) Internal service funds.
• B) Special revenue funds.
• C) Both a and b.
• D) None of the above.

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Definitions:

Gross Profit Rate

The ratio of gross profit to net sales, showing the percentage of revenue that exceeds the cost of goods sold.

Sales Returns and Allowances

Accounts that reduce the total gross sales revenue due to products being returned by customers or allowances for damaged goods.

Purchase Discounts

Reductions in price given by the seller to the buyer for early payment or for buying in bulk.

Freight-In

The cost associated with transporting goods into a business, usually included in the inventory cost of purchased goods.