Question

An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called: Discounts earned. Purchases discounts. Discounts lost. Sales refund payable. Sales discounts.

Answer 1

The account that an expense is recorded in when a cash discount is not taken advantage of is known as Discounts lost.

What is the Discounts lost account?

It is an account found in the general ledger that shows the amount that a company lost when it failed to pay within a certain period that would have allowed it to take advantage of discounts offered.

As it is an expense account, its normal balance will be a debit and will increase when discounts are lost.

In conclusion, option C is correct.

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