Either the gross method or net method may be used to record sales with cash discounts,but the gross method requires a period-end adjusting entry to estimate expected future sales discounts taken.

Question

Quizplus · Accepted Answer

The statement is true. The gross method records sales at the full invoice amount and requires an adjusting entry at the end of the period to estimate the future sales discounts. The net method records sales at the discounted amount and does not require an adjusting entry.

Either the Gross Method or Net Method May Be Used