Accounting for IGCSE & O level - Accounting Procedures (Section 18 - No. 16)

What is the correct accounting treatment for a cash discount received from a supplier?

Debit the discount received account; credit the supplier's account

Credit the discount received account; debit the supplier's account

Debit the purchases account; credit the supplier's account

Credit purchases return, debit supplier account

Since it lowers the total amount owed, we credit the discount received, and the suppliers is debited.