An expense resulting from failing to take advantage of cash discounts on purchases is called:
A) Sales discounts.
B) Trade discounts.
C) Purchases discounts.
D) Discounts lost.
E) Discounts earned.

Question

Quizplus · Accepted Answer

Discounts that are missed and not taken advantage of are referred to as discounts lost. This expense is incurred when a buyer fails to pay for a purchase within the time period specified by the supplier, resulting in the loss of the discount. The expense of not taking advantage of cash discounts may be substantial, and it is generally more cost-effective to take the discount and pay quickly than to wait for a later payment date.

An Expense Resulting from Failing to Take Advantage of Cash