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

Question

Quizplus · Accepted Answer

When using the net method of recording purchases, the buyer pays the full invoice amount within the credit period, and no sales discounts are given by the seller. However, if the buyer fails to take advantage of the cash discount offered by the seller, they will end up paying more than the net amount due, resulting in a loss of discounts. Hence, the correct answer is D) Discounts lost.

An Expense Resulting from Failing to Take Advantage of Cash