The most theoretically sound method of accounting for cash discounts on credit sales is the

A) net price method
B) discounted price method
C) gross price method
D) net present value method

The net price method is the most theoretically sound method of accounting for cash discounts on credit sales. It recognizes the discount at the time of sale and records the sale at its net amount. This method ensures that revenue is recognized at the amount that the company expects to collect, rather than an inflated amount that may not be received due to the discount offered. The other methods listed (discounted price method, gross price method, and net present value method) do not accurately reflect the true value of the sale and can potentially overstate revenue.