Cash discounts on goods already in the system

Whenever goods have arrived from purchase orders, goods are booked into the system with the price defined in the contract underlying purchase order. Typically these items are either:

• taken into stock and credited the inventory account at the price defined
• immediately used and credited the expense account and charged to a cost center

1. taken into stock
3. taken into stock and used later and then charged to a cost center by the purchase price

As bills for these items are received typically with a time delay, cash discounts can