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Company H receives a 10% discount on its order from supplier GD. Which ONE of the following does the discounted amount count as for Company H?
Suggested Answer: A
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30 comments · newest first
CH
Charlena
6 months ago
I feel it's profit too. It improves the bottom line.
KR
Kristel
7 months ago
It’s definitely income. Discounts boost income directly.
DO
Dorothy
7 months ago
But isn't it just a reduction in costs? So, revenue?
VO
Von
7 months ago
I agree with Alex. Profit is the right choice here.
AS
Ashley
7 months ago
No, it's more like income. It affects overall income.
PH
Phillip
7 months ago
I think it counts as profit. Discounts increase profit.
PE
Pearly
7 months ago
I’m surprised this is even a question!
LU
Luisa
8 months ago
Totally agree with you, Dacia!
LI
Lisha
8 months ago
Wait, how can a discount be considered profit?
DA
Dacia
8 months ago
I think it counts as income!
WA
Wayne
9 months ago
It's definitely not revenue.
NA
Nadine
9 months ago
Haha, I bet the person who wrote this question is an accountant with a twisted sense of humor.
ME
Melina
9 months ago
Capital? That doesn't make any sense. The discount is just a temporary reduction in expenses.
LE
Lenny
9 months ago
Profit? No way, the discount is just a reduction in the cost, not an increase in earnings.
BR
Brock
9 months ago
Capital seems off to me; I think it has to do with either revenue or profit, but I need to double-check my notes.
MA
Marge
9 months ago
I feel like this could be classified under income, but I can't recall the exact definitions we went over in class.
KR
Kristin
10 months ago
I remember a practice question where discounts were treated as reductions in expenses, so maybe it relates to profit?
VI
Vilma
10 months ago
I think the discount might be considered as revenue since it reduces the cost of goods sold, but I'm not entirely sure.
GL
Glennis
10 months ago
Ah, I see what they're getting at here. The discounted amount is not revenue, income, or capital - it's a reduction in the cost of the purchase, so it would be reflected in the company's profit. I feel confident I can tackle this type of question.
AR
Arlene
10 months ago
The discounted amount is definitely not revenue. That's just common sense.
VA
Valentine
10 months ago
This is a tricky one. I'm not 100% sure, but I think the discounted amount would be considered a reduction in the cost of goods sold, which would impact the company's profit. I'll double-check my understanding before answering.
LU
Luis
10 months ago
I've got a good handle on this type of question. The discounted amount would be considered a reduction in the cost of the order, so it would count as a decrease in expenses rather than any of the other options provided.
DO
Donte
11 months ago
I think it's income, since the discount reduces the amount the company has to pay.
HE
Herman
11 months ago
Okay, I'm a bit confused on this one. Is the discounted amount considered revenue, profit, income, or capital? I'll need to review my notes to make sure I understand the differences between those concepts.
KI
Kiley
11 months ago
Hmm, this seems like a straightforward accounting question. I'll need to think through the definitions of each of those terms to determine which one best fits the discounted amount.
BR
Brittni
6 months ago
Definitely revenue, it’s part of sales!
TA
Tarra
6 months ago
Capital seems off for this situation.
SA
Sage
6 months ago
I lean towards it being income.
IS
Isaac
6 months ago
I think it might be considered revenue.
KI
Kimbery
11 months ago
But isn't it more about profit?