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Discount received

SSara3y ago
In the Kaplan book, it is stated in Chapter 5 "When preparing the final accounts, discount received is normally netted off against the purchase expense to reduce cost of sales". Later in Chapter 17- Preparing basic financial statements- an example for preparing financial statements shows that the discount received is included as a line item after gross profit is calculated. Is there a discrepancy in how it was dealt with or am I missing something.
John MoffatJohn MoffatTutor3y ago#1
It can be done either way - the final profit will be the same. Obviously you cannot be asked to prepare full financial statements in the exam :-)
SSara3y ago#2
Great! Thank you!
John MoffatJohn MoffatTutor3y ago#3
You are welcome :-)
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