The Discount Lost Account Is Used When The

question 42

Multiple Choice

The Discount Lost account is used when the:

• A) gross method is used and the discount is not taken.
• B) gross method is used and the discount is taken.
• C) net method is used and the discount is not taken.
• D) net method is used and the discount is taken.

---

Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, representing profitability.

Stockholders' Equity

This represents the ownership interest of shareholders in a corporation, calculated as total assets minus total liabilities.

Decrease Total Assets

A reduction in the overall value of a company's assets, which may result from expenses, losses, or distributions to owners.

Wages Expense

It represents the total amount of monetary compensation, bonuses, and the value of non-cash benefits that a company pays to its employees during a specific period.