If a company records a purchase at the gross invoice price and then takes advantage of the discount,the discount is treated as a reduction in the cost of goods sold.

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When a company records a purchase at the gross invoice price and then takes advantage of the discount, the discount is treated as a reduction in the cost of goods sold. This is because the company effectively pays less for the inventory, and the cost of goods sold should reflect the actual cost incurred by the company.

If a Company Records a Purchase at the Gross Invoice