Discount allowed is___________?
Correct answer: B. Expense of business
- A. Income of business
- B. Expense of business
- C. Loss of business
- D. Abnormal loss of business
Explanation
Discount allowed is the reduction granted to a customer for prompt payment, so it is treated as an expense or financial loss of the business. Discount received, in contrast, is income.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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