Asked by Harry Singh on Jun 13, 2024
Verified
Using the voucher system when paying an invoice outside the discount period, assuming the gross method, the entry would be to debit Vouchers Payable, credit Sales Discounts, and credit Cash.
Sales Discounts
Reductions in the price of goods sold, offered to customers as an incentive to either prompt payment or increase sales volume.
Vouchers Payable
Liabilities or debts owed by a company for purchases made on credit, documented by vouchers.
Gross Method
An accounting practice where purchases are recorded at their full invoice amount without deducting any purchase discounts.
- Differentiate between the gross and net methods for recording transactions in the voucher system.
Verified Answer
AC
Alonzo Calderon-BosticJun 18, 2024
Final Answer :
False
Explanation :
Under the gross method, if an invoice is paid outside the discount period, the entry would be to debit Vouchers Payable and credit Cash. Sales Discounts would not be credited because the discount period has passed and no discount is taken.
Learning Objectives
- Differentiate between the gross and net methods for recording transactions in the voucher system.