Arthur Sells Goods on Credit, Requiring Payment Within 30 Days

Multiple Choice

Arthur sells goods on credit, requiring payment within 30 days.He offers a 0.5% discount for early payment.One of his customers, Smart Moves Limited, takes advantage of the discount and transfers a payment of £3980 to settle a debt of £4000. How is the discount of £20 dealt with in Arthur's statement of profit or loss?

A) Added to expenses.
B) Deducted from revenue.
C) Added to cost of sales
D) Deducted from cost of sales.