Question

fill in the blank question
the purchase discount account records discounts offered to the customer for payment within a specified period. this account is a ____ goods sold account, and has a normal (debit/credit) ____ balance.
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Explanation:

1. Purchase discounts reduce the cost of goods purchased, so they are a contra expense account (contra to purchases, which is an expense account for inventory).
2. Contra expense accounts have normal credit balances, as they reduce the total expense (which has a normal debit balance).

Answer:

1. contra expense
2. credit