Redwing Company sold inventory costing $500 to a customer on account for $700. Which of the following does not correctly describe the collection of $686 cash when the customer takes advantage of a sales discount?
A) Gross profit decreases $14.
B) Accounts receivable decreases $700.
C) Net sales decrease $14.
D) Net income is not affecteD.The sales discount decreases net sales, gross profit, and net income.
Correct Answer:
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