Ford Motor Co. is considering alternate methods ofaccounting for the cash discounts it takes when payingsuppliers promptly. One method suggested was to reportthese discounts as financial income when payments aremade. Comment on the propriety of this approach.

Ford Motor Co. is considering alternate methods ofaccounting for the cash discounts it takes when payingsuppliers promptly. One method suggested was to reportthese discounts as financial income when payments aremade. Comment on the propriety of this approach.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 6Q

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Question

Ford Motor Co. is considering alternate methods of
accounting for the cash discounts it takes when paying
suppliers promptly. One method suggested was to report
these discounts as financial income when payments are
made. Comment on the propriety of this approach.

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