NABTEB Accounting 2023 Objective — Question 12

Question 12 of 50 from the National Business and Technical Examinations Board (NABTEB) Accounting 2023 Objective paper, with the correct answer and a full explanation.

Discount allowed is shown in financial statements as an (a) expense (b) an income (c) an asset (d) a liability

A. expenseCorrect
B. an income
C. an asset
D. a liability

Explanation

Discount allowed to customers for early payment is an expense to the business, shown as a deduction in the profit and loss account.

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