Using the gross method, purchase discounts lost are:
A) Included in purchases.
B) Added to accounts payable.
C) Included in interest expense.
D) Deducted from discount income.

Question

Quizplus · Accepted Answer

Purchase discounts lost are included in purchases when using the gross method of accounting for purchases. This is because the gross method assumes that all discounts will be lost, so the full purchase price is recorded as the cost of inventory.

Using the Gross Method, Purchase Discounts Lost Are