Sue, a bookkeeper at a hospital, normally prepares vendor bills for payments but was on vacation. The covering employee missed an invoice totaling $1000 for supplies received. When Sue returns, she discovers that the bill is past due and that the vendor will charge a 5% penalty for late payment. Which of the following is the best way to record the 5% penalty?

Question

Quizplus · Accepted Answer

The penalty for late payment is not directly related to the cost of the medical supplies but is an additional cost incurred due to the late payment. Therefore, it is best recorded as a Miscellaneous Expense.

Sue, a Bookkeeper at a Hospital, Normally Prepares Vendor Bills