Is purchase discount an asset or liability? 1.75K viewsAccounting 0 Lynch 0 Comments How should I account for purchase discounts? It is an asset, a liability or is it only posted in the income statement to reduce the purchase price? 2 Answers ActiveVotedNewestOldest 0 Chambers Posted 0 Comments Purchase discount is a contra account which exists to reduce the purchases. The purchase discount account effectively reduces the payable balance (debit accounts payable) and also reduces purchases (credit purchases). 0 Andrew211 Posted 0 Comments It’s deducted from the cost of sales (a credit) and it’s an asset if you are still waiting to receive it. Register or Login Search for:
