Asked by stefanie gacho on Apr 25, 2024
Why does the gross method of recording sales discounts require an adjusting entry at the end of the fiscal period?
Gross Method
An accounting practice for recording purchases with a discount, where the purchase is initially recorded at gross amount with the potential discount noted separately.
Sales Discounts
A reduction in the price of goods or services offered to a customer, intended to encourage prompt payment or increase sales.
Adjusting Entry
An accounting entry made into a company's general ledger at the end of an accounting period to record any unrecognized income or expenses for the period.
- Chronicle purchasing and selling transactions, employing the gross method to handle sales discounts.
Learning Objectives
- Chronicle purchasing and selling transactions, employing the gross method to handle sales discounts.