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.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.

Outstanding Voting Common Stock

The shares of a company held by shareholders that are entitled to vote and are not held by the company itself.

Amortization

The process of gradually writing off the initial cost of an asset over a period, typically for intangible assets.

Inventory Costing

An accounting method used to value inventory, commonly involving First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or weighted average cost methods.