The technique of recording accounts payable at the amount that will be paid after deducting any discount that is available for paying within the discount period. This has a theoretical advantage over the gross method because the liability is recorded at the amount that will be paid and the purchase is recorded at the cash equivalent amount.
Featured Review
"AccountingCoach got me through university without a tutor! Invaluable resource, even after school!! Thank you so much for providing such a useful, accurate and easy to understand resource! Well worth the membership fee! I got an A+ in my accounting classes!" - Lynn A.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: