Accounting 201 exam 2

What amount is sales discount based?

Invoice price less returns and allowances

Which accounts have a "debit balance"?

Both sales discounts and sales returns and allowances

Gross profit is the difference between net sales and cost of goods sold.


Gross profit?
Operating expenses?

Sales revenues-discounts-cost of goods
Net income-gross profit

Three elements of the "fraud triangle"?

Finical pressure, opportunity, and rationalization

Reasonable assurance

The cost of controlling good should not excise their benefit

Unearned revenue

Cash revived before services are performed

Adjustments for pre-paid expenses

Decrease assets and increase expenses

Account that has a "Zero balance" after closing entries.

Service revenue