Asked by Brizeira Contreras on May 31, 2024
Verified
In accounting for sales discounts, most companies use the
A) allowance method
B) gross price method
C) discounted price method
D) net price method
Sales Discounts
A reduction in the price of goods or services offered to customers, usually to prompt early payment or reward bulk purchases.
Gross Price Method
Gross Price Method involves recording inventory at its gross price, before deducting any trade discounts or rebates.
- Recognize the sophisticated details required in the accounting processes for sales returns, allowances, and discounts.
Verified Answer
SC
Sebastian CardonaJun 06, 2024
Final Answer :
B
Explanation :
Most companies use the gross price method for accounting for sales discounts. This method records the sale without considering the discount. If the customer takes advantage of the discount, the difference is recorded when payment is received.
Learning Objectives
- Recognize the sophisticated details required in the accounting processes for sales returns, allowances, and discounts.
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