What does a sales discount represent quizlet?

What does a sales discount represent quizlet?

What does a sales discount represent? A reduction, not in the selling price, but in the amount to be paid by a credit customer if payment is made within a specific period of time.

What type of account is sales discounts quizlet?

Sales Discounts is a contra asset account.

Which statement below correctly explains what merchandise inventory is quizlet?

Which statement below correctly explains what merchandise inventory is? Merchandise inventory is an asset reported on the balance sheet and contains the cost of products purchased for sale.

How are sales discounts reported in the income statement quizlet?

Sales and receivables are recorded at the gross amount. Sales discounts taken by customers increase the Sales Discounts account which is reported in the income statement as a reduction of sales. Sales and receivables are recorded at the net amount.

Are sales discounts an expense?

Definition of Sales Discounts Sales discounts (along with sales returns and allowances) are deducted from gross sales to arrive at the company’s net sales. Hence, the general ledger account Sales Discounts is a contra revenue account. Sales discounts are not reported as an expense.

What do trade discounts represent?

Trade discounts represent a reduction in the listed price of a product or service. Net revenues are also often referred to as net sales. Both sales returns and sales allowances are classified as contra revenues.