Asked by Isaac Rojas on Jun 13, 2024
Verified
The entry to record payment of a voucher, for an invoice paid within the discount period, under the net method will include:
A) a debit to Purchase Discounts Lost.
B) a credit to Purchase Discounts.
C) a credit to Discounts Lost.
D) None of these is correct.
Purchase Discounts Lost
Purchase discounts lost refer to the additional amount paid by a buyer for failing to take advantage of the early payment discount offered by a supplier.
Net Method
An accounting technique used to record purchases or sales of goods after deducting any discounts offered at the time of purchase or sale.
Discounts Lost
Charges incurred from not taking advantage of early payment discounts offered by suppliers.
- Absorb the principles of accounting for cash discounts by applying net and gross methods within the framework of the voucher system.
Verified Answer
Learning Objectives
- Absorb the principles of accounting for cash discounts by applying net and gross methods within the framework of the voucher system.
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