Which method may be used to record cash discounts a company receives for paying suppliers promptly?
A) Net method.
B) Gross method.
C) Average method.
D) Both the net method and the gross method.

Question

Quizplus · Accepted Answer

Cash discounts for prompt payment by a company can be recorded using either the net method, which records the purchase at the net of the discount, or the gross method, which records the purchase at the full amount and records the discount separately if taken.

Which Method May Be Used to Record Cash Discounts a Company