Question: 1. Discounts can be purchasing and selling. Purchasing discounts affect the revenue account as a credit and selling affects the sales returns, discounts and allowances

1. Discounts can be purchasing and selling. Purchasing discounts affect the revenue account as a credit and selling affects the sales returns, discounts and allowances account as a debit and is subtracted from gross sales to get net sales. True or False?

2. When finding the discount on inventory you purchased (assuming you are taking the discount within the discount period), you calculate it based on net purchases, or gross purchase- returns and allowances. True or False?

3. Inventory is on the books for it costs us. Cost includes everything you paid to get your inventory ready to sell. True or False?

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