A purchase discount was recorded as a credit to the Purchases account and a debit to Accounts Payable.This error will cause:

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DRecording a purchase discount as a credit to the Purchases account and a debit to Accounts Payable does not affect net income directly because both accounts are balance sheet accounts (Purchases affects the cost of goods sold when inventory is sold, but the discount itself adjusts the inventory cost). However, this error will cause total assets to be overstated because the purchase discount, which should reduce the cost of inventory (an asset), is not being properly accounted for, leading to an overstatement of inventory value.

A Purchase Discount Was Recorded as a Credit to the Purchases