Describe how the transactions listed would be handled applying the gross method and the net method. For example: A $750 invoice with 3/10 net 30 terms
Transaction Gross Method Net Method
(a) Record original transaction
(b) Returned purchases
(c) Discounts taken
(d) Discounts not taken
What will be an ideal response?
Answer:
Transaction Gross Method Net Method
(a) Record original transaction Total price Total price less discount
(b) Returned purchases Original price Original price less discounts
(c) Discounts taken Recorded when taken Already deducted from
original price
(d) Discounts not taken No special procedure Recorded as Discounts Lost
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