Accounting Chapter 9

2/15=2% of the invoice amount may be deducted if paid within 15 days of the invoice date

The normal account balance of Purchases returns and allowances is debit

a form prepared by the customer showing the price reduction taken by the customer for returns and allowances

Cash on hand always equals the recorded amount

All vendors offer purchases discounts

The entry to journalize a purchase of merchandise on account

n/30 means the total invoice amount must be paid within 30 days

The selling price of merchandise must be greater than the cost of merchandise for a business to make a profit

Errors found in the process of total and proving don't need to be corrected until the end of the fiscal period

The price a business pays for goods it purchases to sell is

A corporation can own property, inclur liabilities, and enter into contracts in its own name

The cost account Purchases is used only to record the selling price of merchandise sold

A corporation can't exist independent of its owners

Information in a corporation's account system is kept separate from personal records=Going Concern concept

A journal is proved and ruled only at the end of a fiscal peiod

A reduction in the list price granted to customers is called a trade discount.

writing an account title in the Account Title column of a journal is not necessary if the journal has

A journal used to record only one kind of transaction

Supplies bought for use in a business are recorded in

A purchase on account transaction decreases the amount owed to a vendor

An agreement between a buyer and a seller about payment for merchandise

When supplies are purchased on account, the store supplies account balance is incr. and the AP account balance decr.

Buying supplies on account is recorded in the general journal

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

The source document for a purchases return is a debit memorandum

The petty cash account Cash Short and Over is a temporary account

When purchases are recorded at their cost, including shipping and taxes=Historical Cost concept

When supplies are purchased for use in the business, the amount is recorded in the purchases account

recording the actual amount paid for merchandise or other items bought is the concept

A memo is the source document for recording a purchase on account transaction

The retail price listed in a catalog or on an internet site is called

To begn a new journal page, the totals from the previous journal page are carried forward

The purchases account is classified as

A cahs payments journal is used to journalize

the amount added to the cost of merchandise to establish the selling price

a business that buys and resells merchandise to retail merchandising businesses

the amount added to the cost of merchandise to establish te selling price

A form describing goods sold, the quantity, and the price is

A cash payments journal includes a special amount column for the cash account and the accounts payable account

A special journal used to reord only purchases of merchandise on account is called a purchases journal

the source document for recording a purchase on account

A purchase invoice lists only the total cost of the merchandise

What is the formula for calculating the invoice amount?

the entry to journalize buying supplies for cash

Purchases discounts are recorded in a general ledger account called purchases discount

A business expecting to make money and continue in business indefinitely is applying the concept

A special journal entry is made to show the amount of a trade discount

a purchases journal is used to journalize

Recording entries in a journal with special amount columns does not save time

The entry to journalize payment to repelensih a petty cash fund

a journal amount column headed with an account title is

The contra account Purchases Discount has a normal debit balance

The source document for most cash payments is the check issued

A liability account that summarizes the amounts owed to all vendors is titled

special amount columns are used for transactions that occur