What typically happens if payment is made after the discount period under the net method?

When payment is made after the discount period under the net method, the accounting treatment involves recognizing that the buyer has not taken advantage of the purchase discount that was available. In this case, the "purchase discount lost" account is debited to reflect the expense incurred from missing out on the potential savings, as the payment is made at the full invoice amount rather than the reduced amount that would have been available if payment had been made within the discount period.

This adjustment acknowledges the financial impact of not utilizing the discount, which is an important aspect of managing cash flow and expenses efficiently. Recording the loss in a specific account allows for better tracking of such situations and provides clarity in financial reporting. Thus, debiting the purchase discount lost account appropriately recognizes the missed opportunity for savings associated with early payment.