If a company employs the net method of recording accounts receivable from customers, then sales discounts forfeited should be reported as ________.
A) sales discounts forfeited on the balance sheet an item of "other revenue and expense" on the income statement
B) an item of "other revenue and expense" on the income statement
C) an increase to sales revenue on the income statement
D) a deduction from sales revenue on the income statement

Question

Quizplus · Accepted Answer

Sales discounts forfeited are reported as "other revenue and expense" on the income statement when using the net method, as they represent additional income from customers not taking advantage of early payment discounts.

If a Company Employs the Net Method of Recording Accounts