When a discount is taken for prompt payment under a periodic inventory system, the purchaser would credit:
A)Accounts Payable.
B)Accounts Receivable.
C)Purchases Discounts.
D)Inventory.

Question

Quizplus · Accepted Answer

Purchases Discounts is a contra-revenue account that reduces the amount of Purchases. When a discount is taken for prompt payment, the purchaser records the discount as a credit to Purchases Discounts.

When a Discount Is Taken for Prompt Payment Under a Periodic