What is the internal control advantage of using the net method of accounting for merchandise purchases?
A)It highlights the inefficiency of losing purchase discounts.
B)It guarantees that all purchase discounts will be taken.
C)It automatically increases a firm's cash balance.
D)It results in a higher quality of inventory on hand for customers.

Question

Quizplus · Accepted Answer

The net method records purchases at the net amount after discounts, highlighting any inefficiencies when discounts are not taken, thus improving internal control by emphasizing cost savings opportunities.

What Is the Internal Control Advantage of Using the Net