Under the gross method, purchase discounts taken are:
A) Deducted from interest expense.
B) Added to net purchases.
C) Added to interest income.
D) Deducted from purchases.

Question

Quizplus · Accepted Answer

Under the gross method, purchase discounts taken are deducted from purchases. This is because the discounts reduce the amount that is actually paid for the purchases, and therefore should be reflected as a reduction in the cost of inventory purchased.

Under the Gross Method, Purchase Discounts Taken Are