Is purchase discount an asset or liability? 2.23K 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). You are viewing 1 out of 2 answers, click here to view all answers. Register or Login Search for: