The corresponding liabilities net of cash discounts


The Atgar Corporation records all purchases and the corresponding liabilities net of cash discounts. Whenever it pays after the discount period, it credits cash for the full amount of the invoice, and debits accounts payable for the net amount and an expense account for the discount lost.Explain the arguments for and against this treatment of cash discounts.

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Accounting Basics: The corresponding liabilities net of cash discounts
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