The entry to record payment of a voucher, for an invoice paid within the discount period, under the net method will include:
A) a debit to Purchase Discounts Lost.
B) a credit to Purchase Discounts.
C) a credit to Discounts Lost.
D) None of these is correct.

Question

Quizplus · Accepted Answer

Under the net method, the purchase is initially recorded with the discount deducted. If the payment is made within the discount period, there is no additional entry for the discount since it was already accounted for. Therefore, none of the options provided are correct for the net method.

The Entry to Record Payment of a Voucher, for an Invoice