(Appendix) When the Net-Price Method of Recording Purchases Is Used

question 49

Multiple Choice

(Appendix) When the net-price method of recording purchases is used, the debit to Purchases is for the

• A) full amount of the invoice.
• B) amount of the invoice less available cash discounts.
• C) amount actually paid on the invoice.
• D) amount of the invoice plus available cash discounts.

---

Definitions:

Tangible Capital Assets

Physical assets owned by a firm that are used in its operations over several years, including buildings, machinery, vehicles, and equipment.

Government

The system or group of people governing an organized community, often a state, and the organization by which this group exercises authority and performs functions.

Unexpired Service Potential

the remaining usefulness or service capacity of an asset, usually in the context of public sector accounting.

CICA PSA Handbook

The Public Sector Accounting Handbook issued by the Canadian Institute of Chartered Accountants, providing guidelines for accounting practices in the public sector.