Accounting For Cash Discounts Taken

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Accounting for sales discounts — AccountingTools

(2 days ago) A sales discount may be offered when the seller is short of cash, or if it wants to reduce the recorded amount of its receivables outstanding for other reasons. An example of a sales discount is for the buyer to take a 1% discount in exchange for paying within 10 days of the invoice date, rather than the normal 30 days (also noted on an invoice ...

https://www.accountingtools.com/articles/what-is-the-accounting-for-sales-discounts.html

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Cash Discount - Definition and Explanation

(2 days ago) Under the net method, sales and purchases are recorded at net of cash discount. When the discount is not taken, "Sales Discount Forfeited" (seller) or "Purchase Discount Lost" (buyer) is recognized. Example - Records of the Seller. Company S sold merchandise to Company B for $2,000. A 5% discount will be given if Company B pays the amount ...

https://www.accountingverse.com/dictionary/c/cash-discount.html

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Cash Discount on Sales | Gross vs Net Method | Journal Entries

(3 days ago) Cash discount is the discount offered by seller for paying cash early. Cash discount is only offered on credit sales where the customers do not pay at the time of sale but promise to pay latter. There are two methods of accounting for sales that offer cash discounts; the gross method and the net method.

https://xplaind.com/146208/cash-discount-on-sales

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Accounting For Cash Discounts Taken - Free Coupon Codes

(1 months ago) Accounting for sales discounts — AccountingTools. CODES (6 days ago) A sales discount may be offered when the seller is short of cash, or if it wants to reduce the recorded amount of its receivables outstanding for other reasons. An example of a sales discount is for the buyer to take a 1% discount in exchange for paying within 10 days of the invoice date, rather than the normal 30 days ...

https://www.get-coupon-codes.info/accounting-for-cash-discounts-taken/

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Treatment of Cash discounts - Play Accounting

(5 days ago) Practice and theory are both unsettled with respect to the treatment of cash discounts. These reductions can be taken by the customer if the account balance is paid within a relatively short period. Cash discounts might be viewed first of all as rewards offered for prompt payment. Alternatively, cash discounts missed by customers may be ... Read moreTreatment of Cash discounts

https://www.playaccounting.com/explanation/exp-cer/treatment-of-cash-discounts/

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What is the Journal Entry for Cash Discount ...

(2 days ago) Journal Entry for Cash Discount. 100 keyboards are sold for the invoice price of 300 each with payment terms 1/10, Net 30 days. Journal entry for a cash discount, in this case, will depend on the terms that the buyer will get 1% cash discount from total invoice price if the payment is made within the first 10 days of receipt of the invoice. (Assuming there is no trade discount)

https://www.accountingcapital.com/journal-entries/what-is-the-journal-entry-for-cash-discount/

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How to Record Cash Discounts As Income on a Financial ...

(3 days ago) In accounting, a cash discount or sales discount is any discount you get from a supplier, typically for paying your bill promptly. A "2/10 net 30" discount, for instance, gives you 2 percent off if you pay in full within 10 days. Otherwise, you pay the normal price within 30 days. Even though the supplier ...

https://bizfluent.com/how-6365095-record-discounts-income-financial-statement.html

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Sales Discount in Accounting | Double Entry Bookkeeping

(3 days ago) The sales discount is based on the sales price of the goods and is sometimes referred to as a cash discount on sales, settlement discount, or discount allowed. Sales Discount Example For example, if a business sells goods to the value of 2,000 on 2.5/10, n/30 terms, it means that the full amount is due within 30 days but a 2.5% sales discount ...

https://www.double-entry-bookkeeping.com/sales/sales-discount/

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Purchase Discount in Accounting | Double Entry Bookkeeping

(2 days ago) In addition the terms will often allow a purchase discount to be taken if the invoice is settled at an earlier date. The purchase discount is based on the purchase price of the goods and is sometimes referred to as a cash discount on purchases, settlement discount, or discount received. ... Accounting for purchase discounts requires two journal ...

https://www.double-entry-bookkeeping.com/accounts-payable/purchase-discount/

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Discount allowed and discount received — AccountingTools

(3 days ago) Overview of the Discount Allowed and Discount Received. A discount allowed is when the seller of goods or services grants a payment discount to a buyer. This discount is frequently an early payment discount on credit sales, but it can also be for other reasons, such as a discount for paying cash up front, or for buying in high volume, or for buying during a promotion period when goods or ...

https://www.accountingtools.com/articles/what-is-discount-allowed-and-discount-received.html

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What is a cash discount? | AccountingCoach

(2 days ago) The seller will usually record the $9 cash discount with a debit to the account Sales Discounts. The buyer will record the $9 savings as a credit to Purchase Discounts or as a reduction to the cost recorded in inventory. My dentist offers a 5% cash discount if the dental fee is paid on the day of the service. This discount is offered to avoid ...

https://www.accountingcoach.com/blog/what-is-a-cash-discount

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Best Travel Voucher Accounting For Cash Discounts Taken ...

(1 months ago) accounting for cash discounts taken - Free Coupon Codes. VOUCHER (13 days ago) Accounting for sales discounts — AccountingTools. CODES (1 days ago) An example of a sales discount is for the buyer to take a 1% discount in exchange for paying within 10 days of the invoice date, rather than the normal 30 days (also noted on an invoice as "1% 10/ Net 30" terms).

https://fireboxvoucher.com/accounting-for-cash-discounts-taken

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How to Define Accounts for Cash Discount Taken in SAP

(7 days ago) Step 3: – Under Account assignment option, update the cash discount received G/L in the field account as shown below image. After assignment of general ledger cash discount received accounts, click on save button and save the configured details. Successfully we have defined accounts for cash discounts taken in SAP Financial Accounting.

https://www.tutorialkart.com/sap-fico/define-accounts-for-cash-discount-taken-in-sap/

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What is the Journal Entry for Discount Allowed ...

(2 days ago) Trade discount is not shown in the main financial statements, however, cash discount and other types of discounts are supposed to be recorded in the books of accounts. In case of a transaction where both trade discount and cash discount are allowed, trade discount is allowed first and then cash discount is processed.

https://www.accountingcapital.com/journal-entries/journal-entry-for-discount-allowed/

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Accounting for discounts under IFRS - IFRSbox - Making ...

(3 days ago) Hi Sunil, maybe this article will bring some light into accounting for these discount vouchers. In relation to the “minimum spend”, only the probability of redemption and expected amount of redemption will be affected and accounting is the same. Please take a look to the article in the link – you will find some practical examples there. S.

https://www.ifrsbox.com/accounting-discounts-ifrs/

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GAAP Accounting Rules for Sales Tax on Discounts | Your ...

(2 days ago) Recording Cash Discounts The generally accepted method for handling cash discounts on a credit sale is to record and track the discount in a separate sales discount account. Because you have no way of knowing whether the customer will take advantage of the cash discount at the time of the sale, debit accounts receivable for the total amount ...

https://yourbusiness.azcentral.com/gaap-accounting-rules-sales-tax-discounts-27463.html

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Solved: Discounts vs sales discounts, which account to use?

(1 months ago) They might be using a separate COGS account to hold "purchase discounts" which is Contra-accounting Expense. I have seen this in files, where they enter the Gross cost and "take a discount." 1 ... It works great for accrual basis but when I change to a cash basis P&L, the discount did not move over to the month I received payment. It stayed in ...

https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/discounts-vs-sales-discounts-which-account-to-use/00/201438

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Accounting for Sales Discount - Explanation on Types of ...

(2 days ago) Before we proceed with the accounting entries, it is necessary to first distinguish between the two types of discounts being offered by Bike LTD. The 10% discount is a trade discount and should therefore not appear in Bike LTD's accounting records. The $5 discount is a cash discount and must be dealt with accordingly.

https://accounting-simplified.com/accounting-for-sales-discount.html

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Accounting treatment for discount to customers for early ...

(3 days ago) Accounting treatment for discount to customers for early payment (“cash discount”) There are situations where you might be in need of cash or to simply motivate your customers to pay up quicker to have some buffer when it comes to more liquid resources, you’d implement something called a cash discount.

http://www.officetodo.com/public/accounting-treatment-for-discount-to-customers-for-early-payment-cash-discount/

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Should a cash discount be recorded as a reduction to an ...

(2 days ago) Should a cash discount be recorded as a reduction to an expense? Yes, a cash discount should be a reduction to an expense. After all, accountants define cost as the cash amount (or cash equivalent amount) at the time of the transaction. To illustrate, let's assume that your company receives marketing consulting services and is billed $10,000 with terms of 1/10, net 30.

https://www.accountingcoach.com/blog/should-a-cash-discount-be-recorded-as-a-reduction-to-an-expense

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Accounting Purchase Discount - Explanation on Types of ...

(2 days ago) Before we proceed with the accounting entries, it is necessary to first distinguish between the two types of discounts being offered by BMX LTD. The 10% discount is a trade discount and should therefore not appear in Bike LTD's accounting records. The $5 discount is a cash discount and must be dealt with accordingly.

https://accounting-simplified.com/accounting-for-purchase-discount.html

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Gross Method of Accounting for Cash Discounts | Your Business

(2 days ago) The net method assumes that the buyer will take advantage of the cash discount. In the example, the original entries to accounts payable or accounts receivable are for $490 instead of $500. If the purchaser declines the discount, the seller records a $10 credit to sales discounts forfeited, and the buyer books a $10 debit to purchase discounts ...

https://yourbusiness.azcentral.com/gross-method-accounting-cash-discounts-24556.html

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Cash discounts - Finance | Dynamics 365 | Microsoft Docs

(3 days ago) Cash discounts are setup and shared for Accounts payable and Accounts receivable. The cash discount available can be defined on the customer invoice or vendor invoice, and will be taken if the invoice is paid within the cash discount date. Cash discounts. Cash discounts for both customers or vendors can be created in the Cash discounts page.

https://docs.microsoft.com/en-us/dynamics365/finance/cash-bank-management/cash-discounts

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What is a Cash Discount? - Definition | Meaning | Example

(3 days ago) Definition: A cash discount, also called a purchase discount or sales discount, is a reduction in the purchase price of a good because of early cash payment.In other words, the seller of goods is willing to reduce the price of the goods if the buyer is willing to pay for the good earlier.

https://www.myaccountingcourse.com/accounting-dictionary/cash-discount

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Cash Discount Definition - investopedia.com

(2 days ago) Cash Discount Example . An example of a typical cash discount is a seller who offers a 2% discount on an invoice due in 30 days if the buyer pays within the first 10 days of receiving the invoice ...

https://www.investopedia.com/terms/c/cash-discount.asp

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Solved: Correct way to enter a Discount on a Vendor Bill.

(2 months ago) If the above statement is correct - then I see that accounting for the discount can be tracked in several ways in QB Online: 1) Create a vendor credit memo and apply at time of payment using the same product/service code as the original invoice; 2) Set up a product / service line item assigned to the appropriate / corresponding account number ...

https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/correct-way-to-enter-a-discount-on-a-vendor-bill/00/201960

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Ch 7 Quiz Flashcards | Quizlet

(29 days ago) A company uses the gross method to account for cash discounts offered to its customers. If payment is made before the discount period expires, which of the following is correct? Sales discounts is credited for the amount of discounts taken by customers. Accounts receivable is credited for the amount of discounts taken by customers.

https://quizlet.com/329336437/ch-7-quiz-flash-cards/

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What is cash discount - accounting entries

(4 days ago) The cash discount taken by the buyer is called a discount on purchases and a cash discount granted to a customer is known as discount on sales.Discount on sales is allowed,while discount on purchases is discount received.Discount allowed to customers ( debtors) is a business expense, discount received from suppliers ( creditors) is a business income.

https://tallygame.com/accounting/cash-discounts-accounting-entries/

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1%/10 Net 30 Definition - Investopedia

(3 days ago) The accounting entry for a cash discount taken may be performed in two ways. The gross method of purchase discounts assumes the discount will not be taken and will only input the discount upon ...

https://www.investopedia.com/terms/1/1-10net30.asp

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Accounts Receivable Sales Discounts, Cash Discounts (Gross Method Vs Net Method)

(3 months ago) Accounting for the recognition of accounts receivable, the amount to be recognized is the exchange price between the buyer and seller, the price of the exchange can incude (1) trade discounts or ...

https://www.youtube.com/watch?v=k_GrRQZ2aiw

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What are Discounts Lost? - Definition | Meaning | Example

(2 days ago) Definition: Discounts lost are expenses that occur because a cash discount was not taken. In other words, it’s the difference between the full invoice price and discounted price of a product when a sales discount is offered. What Does Discounts Lost Mean? You might be thinking that a discount not taken shouldn’t be recorded as an expense ...

https://www.myaccountingcourse.com/accounting-dictionary/discounts-lost

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How is VAT affected by discounts? | Informi

(3 days ago) The amount payable if the prompt payment discount is not taken is shown (£306), along with the terms of the prompt payment discount – ‘A 3% discount applies if payment is made within seven days of the invoice date.’ Option 1 – Issue a credit note. The customer pays the reduced amount, therefore a credit note is issued.

https://informi.co.uk/finance/how-vat-affected-discounts

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Inventory: Discounts – Accounting In Focus

(13 days ago) How are we paying the balance? With cash, so we must credit Cash for the amount of cash being paid. Because of the discount, the amount will be less than $5,000. If we take 3% of $5,000, we calculate the discount as $150. Therefore, the amount of cash needed to fulfill the obligation is $4,850. What do we do with the $150?

https://accountinginfocus.com/financial-accounting/inventory/inventory-discounts/

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Accounting ch7 Flashcards | Quizlet

(3 months ago) The accounting for cash discounts and trade discounts are. Net approach. Of the approaches to record cash discounts related to accounts receivable, which is more theoretically correct? cash discounts under the net method. All of the following are problems associated with the valuation of accounts receivable except.

https://quizlet.com/77923802/accounting-ch7-flash-cards/

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Purchases Discounts - CliffsNotes

(2 days ago) Companies that take advantage of sales discounts usually record them in an account named purchases discounts, which is another contra‐expense account that is subtracted from purchases on the income statement.If Music Suppliers, Inc., offers the terms 2/10, n/30 and Music World pays the invoice's outstanding balance of $900 within ten days, Music World takes an $18 discount.

https://www.cliffsnotes.com/study-guides/accounting/accounting-principles-i/accounting-for-a-merchandising-company/purchases-discounts

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Recognition of accounts receivable - Accounting for Management

(2 days ago) The cash discount (also known as sales discount) is the relaxation in price that sellers offer to buyers to induce them for prompt payments. For example, a payment term expressed as 1/10, n/30 means that the buyer will be entitled to a cash discount of 1% if he makes payment within 10 days otherwise the gross amount is payable in 30 days.

https://www.accountingformanagement.org/recognition-of-accounts-receivable/

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Discounts | ACCA Global

(2 days ago) ACCOUNTING FOR DISCOUNTS. Prompt payment discounts (also known as settlement or cash discounts) are offered to credit customers to encourage prompt payment of their account. It is not guaranteed that customers will take advantage of prompt payment discounts at the point of sale as it is dependent upon whether or not credit customer pays within ...

https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f3/technical-articles/discounts.html

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Cash discount - What is a cash discount? | Debitoor invoicing

(2 days ago) A cash discount is intended to persuade credit customers to pay their bills quickly – not an incentive to make the purchase. Cash discounts: shorthand. In accounting, usually the discount amount and the time period within which it is available, are expressed in a format such as 2/10, n/30. This means a 2% discount if the invoice is paid ...

https://debitoor.com/dictionary/cash-discount

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Accounting for Cash (Sales) Discounts On December 1, 2019 ...

(4 days ago) Accounting Intermediate Accounting: Reporting And Analysis Accounting for Cash (Sales) Discounts On December 1, 2019, Lynch Incorporated sold $18,000 of merchandise with terms 2/10, n/EOM, On December 11,2019, collections were made on sales originally billed for $12,000, and on December 31,2019, additional collections on sales originally billed for $5,000 were received.

https://www.bartleby.com/solution-answer/chapter-6-problem-4e-intermediate-accounting-reporting-and-analysis-3rd-edition/9781337788281/accounting-for-cash-sales-discounts-on-december-1-2019-lynch-incorporated-sold-18000-of/988d41fe-8c54-11e9-8385-02ee952b546e

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Journal entry for cash discount - Play Accounting

(2 days ago) The percentage of cash discount is mentioned in payment terms. For example, the terms 2/10, n/30 means a 2% discount will be allowed if the payment is made within 10 days of the date of invoice, otherwise, the full amount is to be paid in 30 days. Journal entry for cash discount. Cash discount is an expense for seller and income for buyer.

https://www.playaccounting.com/explanation/gj-exp/journal-entry-to-record-cash-discount/

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How to Charge GST/HST on Discounts - The Balance Small ...

(2 days ago) For a discount offered at the time of sale, you charge GST/HST on the net amount (the sale price minus the discount).So for instance, if a customer bought ten dancing hula lamps that normally cost $100 each and you were offering a 10 percent discount on that item, you would charge the customer GST/HST on the net amount of $900 ($1000 minus the $100 discount).

https://www.thebalancesmb.com/how-do-i-charge-gst-hst-on-discounts-2948154

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Automatic Posting for Cash Discount Granted | SAP Blogs

(2 days ago) Cash Discount process in SAP: In SAP the following steps would be involved in the entire cash discount cycle: The cash discount terms are configured in the terms of payment. General Ledger account would have to be assigned for posting the cash discount. The terms of payment configured above are assigned to the customer master.

https://blogs.sap.com/2012/03/28/automatic-posting-for-cash-discount-granted/

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How To Calculate VAT on Settlement Discounts: A reminder ...

(2 days ago) Normal payment terms are 60 days. However, because cash is tight for Gadget Ltd, they now decide to offer their customers a settlement discount of 5% if payment is made within 15 days. (When you get to AAT Level 4, you can learn how to calculate the effective cost of doing this. Ow!) The VAT they now charge is £19. £100 less 5% discount = £95.

https://www.accountancylearning.co.uk/vat-on-settlement-discounts/

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Factoring Accounts Receivable Faeber Textile Company ...

(6 days ago) The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the ...

https://www.bartleby.com/solution-answer/chapter-6-problem-10p-intermediate-accounting-reporting-and-analysis-3rd-edition/9781337788281/factoring-accounts-receivable-faeber-textile-company-frequently-factors-its-accounts-receivable/9d9869d3-8c54-11e9-8385-02ee952b546e

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How to Calculate Settlement Discounts - Accountancy Learning

(4 days ago) This time, we need to start off with the trade discount calculation. Take the goods total of £575.00 and multiply this by 10% i.e. i.e. £575.00 x 10 / 100 = £57.50 OR £575 x 0.10 = £57.50. Deduct the trade discount of £57.50 from the goods total amount of £575.00. i.e. £575.00 – £57.50 = £517.50. This figure is our net amount.

https://www.accountancylearning.co.uk/calculate-settlement-discounts/

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Accounting for Cash Transactions

(4 days ago) If you are use cash from the day's receipts for small expenses, must sure to accurately record all cash taken from the cash register and prepare a cash sheet at the end of the day to help control cash paid out of the register. Steps for Creating a Petty Cash Fund. Start a petty cash fund by writing a check to "Petty Cash." Cash the check.

https://www.bizfilings.com/toolkit/research-topics/finance/basic-accounting/accounting-for-cash-transactions

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Purchase Discounts - How do you handle them? - Another71.com

(4 days ago) 1. How do you handle purchase discounts taken on invoices you pay early? I have generally seen them expensed in the month the invoices are paid especially when immaterial. DR. Accounts Payable. CR. Cash. CR. Purchase discount (income statement usually in COGS) 2. On the other hand, I have also seen inventory values reduced. DR. Accounts Payable ...

https://www.another71.com/cpa-exam-forum/topic/purchase-discounts-how-do-you-handle-them/

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Solved: Accounting treats cash discounts taken on the ...

(2 months ago) Accounting treats cash discounts taken on the purchase of merchandise or equipment as a reduction in the amount recorded for the assets acquired.

https://www.chegg.com/homework-help/accounting-treats-cash-discounts-taken-purchase-merchandise-chapter-3-problem-6q-solution-9780324651140-exc

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