Cash discounts can be considered as a business expense. If a customer buys more than a pre-specified quantity or if a customer pays on time (or earlier , then a cash discount can be applied. For accounting purposes, the cash discounts are not recorded as an expense but as debit (reductions) in the sales accounts. The reason for that is when a discount is given, the revenue recorded is higher than what was actually earned. Therefore, by reducing (or debiting) your revenue account, you ensure that the revenue is not overstated.