A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause
A) the net income for the period to be overstated.
B) the net income for the period to be understated.
C) the sales discount account to be understated.
D) the sales account to be overstated.

Question

Quizplus · Accepted Answer

Debiting the sales discount to Sales instead of the Sales Discount account results in reducing the sales revenue more than it should be. This does not affect the net income directly through overstating or understating it but rather results in the sales account being overstated because the discount was not recorded in the proper account to show the reduction in sales revenue.

A Sales Discount Correctly Taken by the Charge Customer Was