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The instructor also wanted Holtz using numbers of her own choosing, to illustrate the issues she was raising and her tentative answers with simple numberical illustrations whenever possible. The list follows:
Evidently, there are three ways of handling purchase discounts
Case 6-4
1. All three methods do affect the net income
- Deducted Purchased Goods: Will affect the cost of the good by decreasing it, which will affect the net income in the period the product is sold.
- Other Income: Net Income would be higher than the other methods.
- Not taken discount as expense: Cost of goods sold will be lower as discount will be counted, however it will decrease net income while being an expense...
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