Is purchase discount an asset or liability?

Question

643 viewsMarch 29, 2021Accounting

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Lynch December 2, 2012 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?

score 0 · Answer 1 · 2013-05-04T18:16:25+00:00

It’s deducted from the cost of sales (a credit) and it’s an asset if you are still waiting to receive it.