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The Corporate Finance Institute Accounting
Gross Method
Purchase Date
DR Inventory: 100,000
CR Accounts Payable: 100,000
If discount taken
DR Accounts Payable: 100,000
CR Cash: 98,000
CR Inventor: 2,000
If discount not taken
DR Accounts Payable: 100,000
CR Cash: 100,000
Net Method
Purchase Date
DR Inventory: 98,000
CR Accounts Payable: 98,000
If discount taken
DR Accounts Payable: 98,000
CR Cash: 98,000
If discount not taken
DR Accounts Payable: 98,000
DR Purchase discounts lost (expense): 2,000
CR Cash: 100,000
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