Cash discount

Could you explain why it's not deducted from purchase price ?

When we entered the sale in the seller's records, we debited Receivables and Credited Revenue But we didn't receive the full amount from the Receivables, we only received an amount net of a cash discount Let's play with some figures The sale was for $1,000 and the cash discount is $50 Dr Receivables $1,000 Cr Revenue $1,000 Dr Cash $950 Cr Receivables $950 Dr Discount expense $50 Cr Receivables $50 OK?

I want to check again : It mean when we buy good if there is a cash discount,we need a period time to know whether customer payment in early to get cash discount. So we don't deduct this amount in receivable until customer payment , that why cash discount is finance expense?

That's correct - this is covered by John Moffat in his F3 lectures!