A purchase discount correctly taken was debited to Purchases at the time the entry was recorded.This error will cause:

Question

Quizplus · Accepted Answer

Since the purchase discount was not properly recorded, the cost of the purchased items was overstated, causing the expenses to be overstated and ultimately causing the net income to be understated. This means that the correct amount of profit was not reported, and therefore the net income was affected.

A Purchase Discount Correctly Taken Was Debited to Purchases at the Time