If a company uses the gross method of recording accounts receivable, then cash discounts taken should be reported as
A)a deduction from sales in the income statement.
B)an item of "other expense" in the income statement.
C)a deduction from accounts receivable in determining the net realizable value of accounts
Receivable.
D)sales discounts forfeited in the cost of goods sold section of the income statement.

Question

Quizplus · Accepted Answer

Under the gross method, cash discounts taken by customers are recorded as a deduction from sales, reflecting the actual revenue earned after discounts.

If a Company Uses the Gross Method of Recording Accounts