The net method of recording accounts receivable is rarely used because it
A)is less theoretically correct than the gross method.
B)requires an "Allowance for Sales Discounts" to be reported on the statement of financial position.
C)has a different effect on the statement of financial position and income statement.
D)requires more bookkeeping for the additional adjusting entries after the discount period has passed.

Question

Quizplus · Accepted Answer

The net method requires more bookkeeping because it involves adjusting entries if customers do not take advantage of the sales discounts within the discount period.

The Net Method of Recording Accounts Receivable Is Rarely Used