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Company A records purchase discounts as the author states. Company B records purchase discounts as Other Income. Company B makes the journal entry Accounts Payable debit and Purchase Discounts Takes credit. Purchase Discounts Takes is put on the Income Statement as Other Income.

Discussion Questions:
1. Is Company B using an acceptable method? Justify your answer with accounting terms such as materiality, matching, historic cost, and other terms.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9975395

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