Asked by Adrian Batista on Apr 26, 2024
Verified
The net method records the invoice at its net amount (net of any cash discount).
Net Method
An accounting method where discounts for prompt payment are assumed in the recorded costs; if the discount is not taken, the expense is recorded later.
Cash Discount
A deduction from the invoice price that a seller allows to a buyer in return for paying the bill early.
Invoice
A document sent to a buyer that specifies the quantities and costs of the products or services provided by the seller.
- Comprehend the distinctions between the net method and the gross method in documenting purchases and sales transactions.
Verified Answer
MB
Michelle BakerMay 02, 2024
Final Answer :
True
Explanation :
The net method records the invoice at its net amount, which is the amount after deducting any cash discount. It is also known as the net of discount method.
Learning Objectives
- Comprehend the distinctions between the net method and the gross method in documenting purchases and sales transactions.