The two methods for accounting for receivables are the net method and the gross method.
In order to earn a sales discount, the net technique assumes that every buyer will pay on time. Record the discounted invoice amount in your accounting journal at the time of a sale. To increase the accounts receivable account by the amount you anticipate receiving, debit the discounted invoice amount.
In contrast to the net approach, the gross method records an invoice at its full price regardless of any offered cash discounts. To put it another way, the gross technique makes the assumption that the consumer won't benefit from the cash or early payment incentive.
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