Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Gross method
A)Most recent purchases will be included in ending inventory.
B)1 - (Cost of goods sold Net sales).
C)Purchase discounts not taken are included in inventory.
D)Products that are not yet complete.
E)Purchase discounts not taken are considered interest expense.

Question

Quizplus · Accepted Answer

EThe gross method of accounting for purchase discounts records the inventory at the purchase price without the discount. If the discount is not taken, under the gross method, the amount not taken as a discount is included in the cost of inventory (C). Additionally, some accounting practices might treat the discounts not taken as an interest expense, reflecting the cost of not taking advantage of the discount terms offered by suppliers (E).

Listed Below Are 5 Terms Followed by a List of Phrases