Sepulveda Inc. uses the perpetual inventory system when recording its cash payments and cash receipts. If the company receives a check from a customer for goods sold and it is received within the discount period, identify the account used to record the discount.

Question

Quizplus · Accepted Answer

The account used to record the discount received by the customer is Sales Discounts. This account is a contra account to the Sales account, and its purpose is to track the discounts given to customers for paying their invoices before the due date.