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22 December, 08:32

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?

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  1. 22 December, 08:39
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    I don't know what are the options available but I know how to account for the cash discounts. For example if the company $10 of discount to the customer for purchasing $100, then the accounting treatment will be as under:

    Dr Cash discount (Expense in nature) 10

    Dr Cash Received 100

    Cr Sales 110
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