Century 21 Accounting (9E) Chapter 9 Review

Purchase Returns and Allowances is a contra account to Purchases

If merchandise is purchased for $1000 on Aug 1, with terms of sale 2/10, n/30, the cash due to the vendor on Aug 9 is

A transaction in which the merchandise purchased is to be paid for later is called a(n)

The source document that is prepared when there is a return of merchandise to the vendor

A _______________ journal is used to record only one kind of transaction.

A _______________ reduces a related account on a financial statement.

Contra accounts' normal balances are opposite the normal balances of their related accounts.

An invoice used as a source document for recording a purchase on account

The amount added to the cost of merchandise to establish the selling price is called

A deduction that a vendor allows on the invoice amount that encourages prompt payment

Trade discounts are recorded as purchases discounts.

An invoice used as a source document for recording a purchase on account is called a

A business from which merchandise is purchased is called a vendor.

The source document for paying cash is

The terms of sale 1/10, n/30 means that you may deduct 1% of the invoice amount if payment is made within 30 days.

Goods that a business purchases to sell are called

The price a business pays for goods it purchases is called

Purchases Discount is increased by a credit entry

All purchases , including purchases made on account and purchases made for cash are recorded in the Purchases Journal

Since contra accounts are offsets to their related accounts, contra account normal balances are

The Purchases account is increased by a credit and decreased by a debit

A business that sells to those who use or consume goods is called a(n)

The invoice amount is recorded only once in a purchases journal entry.

A petty cash on hand amount that is more than a recorded amount is called cash over.