18. If a company employs the net method of recording accounts receivable from customers, then sales discounts taken should be reported as O a. a deduction from sales in the income statement. O b. an item of "other income and expense" in the income statement. c. a deduction from accounts receivable in determining the net realizable value of accounts receivable. d. should not be used.

18. If a company employs the net method of recording accounts receivable from customers, then sales discounts taken should be reported as O a. a deduction from sales in the income statement. O b. an item of "other income and expense" in the income statement. c. a deduction from accounts receivable in determining the net realizable value of accounts receivable. d. should not be used.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At the time companies write off accounts receivable, there is no effect on net income. true or false
May you please help me determine which statements are false or true?
If a fictitious sale has been recorded, this affects the a) existence of sales. b) valuation of accounts receivable. c) occurrence of sales and existence of accounts receivable. d) occurrence of accounts receivable.
The normal balance of the account "Sales Allowances" is a Debit; it is a contra revenue account to Sales Revenue OB. Credit; it is a contra asset account to Accounts Receivable OC. Debit, it is an expense in the income statement OD. Credit, it is a contra expense account to Bad Debt Expense -because A.
For part 2, do "written off" and "previously written off accounts collection" fall under debit or credit?
Statement 1: In case there is a credit balance in a customer's account, such amount shall not affect the total balance of the accounts receivable to be presented in the asset section of the statement of financial position.Statement 2: A credit balance in a customer's account is caused by overcollection of amounts receivable from customers which will result to a liability to be presented in the noncurrent section of statement of financial position.Which statement(s) is(are) correct?
19.Which of the following statements is incorrect? a. Trade receivables are recognized simultaneously with the recognition of related revenue when the criteria for revenue recognition are met. b. Under the gross price method, sales discounts are reported as a deduction from sales revenue. c. When accounts receivable are pledged against borrowing, the amount of accounts receivable pledged shall be included in the total receivables with disclosures. d. When discounting notes, the term discount period refers to the period of time that the note has been held by the endorser or payee; i.e. the period from the date of the note up to the date of discounting.
This is a method of recognizing bad debts that requires a company to estimate the uncollectible accounts rather than wait for an account to actually be identified as uncollectible. Direct write-off method O Allowance method
It is an amount owed to suppliers for goods purchased or services performed on credit. a. Outstanding expenses b. Accounts payable c. Unearned revenues d. Bank overdrafts
Which among the statements is not correct? a. Net realizable value of accounts receivable results when accounts receivable is reduced by allowance for doubtful accounts b. Credit balances in accounts receivable arising from customer's advances should be excluded from accounts receivable c. The allowance method of recording bad debt loss is the one consistent with accrual accounting. d. answer not given
Which of the following is correct regarding accrual basis of accounting? a. No bad debts are recognized because trade receivables are not recognized. b. Accrual sales is equal to cash sales plus collection of trade receivables. c. Accrual purchases is equal to cash purchases less purchases on account. d. Doubtful accounts are treated as bad debts.
Receivables are valued and reported in the statement of financial position at their gross amount less any sales returns and allowances and less any cash discounts. True or False