The gross method of recording purchases refers to the method of recording:
A) Purchases at the invoice price less any cash discounts.
B) Specified amounts and timing of payments that a buyer agrees to make in return for being granted credit.
C) Purchases at the full invoice price, without deducting any cash discounts.
D) Inventory at its selling price.
E) Inventory at the lower of cost or market.

Question

Quizplus · Accepted Answer

The gross method of recording purchases involves recording purchases at the full invoice price without deducting any cash discounts. This means that the purchases are recorded at the gross amount, which includes the cost of the goods plus any applicable taxes or fees. This method is used when a company does not take advantage of purchase discounts, and therefore records the full amount of the invoice as the cost of the goods.

The Gross Method of Recording Purchases Refers to the Method