Regal Artworks Co.records purchases net of all available purchase discounts.If the company makes payment after the discount has expired,the entry to record the payment should include a:
A)Debit to Purchase Discounts Lost.
B)Credit to Purchase Discounts Lost.
C)Debit to Sales Discounts.
D)Credit to Sales Discounts.

Question

Quizplus · Accepted Answer

If the company makes payment after the discount has expired, it means that the company has lost the purchase discount that was initially available. Therefore, the entry to record the payment should include a debit to Purchase Discounts Lost, which represents the lost discount. The other choices, such as sales discounts and credits, are not applicable in this scenario.