Feng Ltd., a household appliances dealer, purchases its inventories from various suppliers. Instructions Feng is considering alternate
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Instructions
Feng is considering alternate methods of accounting for the cash discounts it takes when paying its suppliers promptly. From a theoretical standpoint, discuss the acceptability of each of the following methods.
a. Financial income when payments are made.
b. Reduction of cost of goods sold for the period when payments are made.
c. Direct reduction of purchase cost.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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