A purchase discount for early payment of an invoice is a credit entry under Purchase .Discounts False True

**True**<br /><br />A purchase discount for early payment of an invoice is recorded as a credit entry under "Purchase Discounts." <br /><br />### Explanation:<br />When a company takes advantage of a purchase discount (e.g., 2/10, net 30), it reduces the cost of the purchase. In accounting, this reduction is recorded in the "Purchase Discounts" account, which is a contra-expense account. Contra accounts have a normal credit balance, so the discount amount is credited to the "Purchase Discounts" account.<br /><br />For example:<br />- If the original invoice amount is $1,000 and the company pays within the discount period to receive a 2% discount ($20), the journal entry would be:<br /><br /> **Debit:** Accounts Payable $1,000 <br /> **Credit:** Cash $980 <br /> **Credit:** Purchase Discounts $20 <br /><br />This reflects the reduction in the total expense due to the early payment discount.