If a company uses the net method of valuing accounts payable and does not take a prompt payment discount, how would the additional payment above the amount recorded in accounts payable be accounted for?

It is recorded as an additional expense for lost discounts on the income statement.

It is treated as a counterbalancing error that will self-correct in the following accounting period.

It is recorded as a reduction in the cost of goods sold on the income statement.

It is charged off against a reserve for lost discounts.