Discounts That Apply to the Accumulation of Purchases of a Product

question 89

Multiple Choice

Discounts that apply to the accumulation of purchases of a product over a given time period,such as a year,are referred to as

• A)promotional allowances.
• B)cumulative quantity discounts.
• C)cash discounts.
• D)functional discounts.
• E)noncumulative quantity discounts.

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Definitions:

Income Summary Account

An account used in the closing process to summarize the period's revenues and expenses before transferring the net income or loss to retained earnings.

Owner's Capital Account

Represents the total equity or investment that the owner has in the business, including initial investment and subsequent profits or losses.

Balance

The amount of money or value remaining in an account after accounting for debits and credits.

Income Summary

An account used in the closing process that summarizes the revenue and expenses for a specific accounting period.