Either the gross method or net method may be used to record sales with cash discounts, but the net method requires a period-end adjusting entry to estimate expected future sales discounts taken.

Question

Quizplus · Accepted Answer

The gross method requires a period-end adjusting entry to estimate expected future sales discounts taken, not the net method. The net method records sales net of discounts from the outset.

Either the Gross Method or Net Method May Be Used