Accounting Chapter 9 Review

The source document for a cash purchase is

The purchase account is classified as

The terms 1/10, n/30 means the customer may deduct 1% from invoice if paid in 30 days.

A deduction that a vendor allows on the invoice amount to encourage prompt payment.

A journal used to record only one kind of transaction.

A form prepared by a customer showing price deduction taken by customer for returns/allowances.

Trade discounts normally are recorded in the purchases discount account.

Supplies bought for use in a business are recorded in the

The purchases account is increased by a credit and decreased by a debit.

Purchases discount is increased by a credit entry.

Merchandise purchased for $1,000 on August 1, terms 2/10, n/30, amount due on August 9 is:

Purchases Returns and Allowances is a contra account to Cost of Merchandise.

A merchandising business that sells to those who use or consume the goods.

Purchases Returns and Allowances

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

Each unit of ownership in a corporation.

Credit allowed for the purchase price of returned merchandise, resulting in decrease of A/P.