An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called:
A) Trade discounts.
B) Discounts earned.
C) Purchases discounts.
D) Discounts lost.
E) Sales discounts.

Question

Quizplus · Accepted Answer

Failing to take advantage of cash discounts when using the net method of recording purchases is commonly referred to as "discounts lost". It represents an expense incurred by the buyer, as they are now required to pay the full amount owed to the seller without receiving any discount. It is important for businesses to keep track of discounts lost, as it can have a significant impact on their overall profitability.

An Expense Resulting from Failing to Take Advantage of Cash