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?

Question

Quizplus · Accepted Answer

Net income is affected because the sales discount reduces the revenue recognized, thus decreasing net income by the amount of the discount.

Redwing Company Sold Inventory Costing $500 to a Customer on Account