Chapter 8 Accounting

What accounts are affected when I issued a check to a supplier as a payment on account?

Debit: Accounts Payable Credit: Cash

What accounts are affected when I returned some damaged merchandise to a supplier and received a credit memorandum?

Debit: Accounts Payable Credit: Purchases Returns and Allowances

What accounts are affected when I purchase merchandise for cash?

Debit: Purchases Credit: Cash

What accounts are affected when I purchase merchandise on terms of 2/10, n/30? The supplier's invoice includes a freight charge.

Debit: Purchases, Freight In Credit: Accounts Payable

Freight charges on merchandise purchases should be debited to:

Freight In

Where does the cost of transportation get booked?

Freight In

an account showing transportation charges for items purchased

Freight in account

Credit purchases of supplies that are to be used in the business are entered in :

General journal

What types of transaction is recorded in the purchases journal?

Merchandise purchased on credit for resale

an account used to record the purchase of goods on credit

Purchase Account

a price reduction from the amount originally billed

Purchase Allowance

a bill received for goods purchased

Purchase Invoice

a list sent to the purchasing department showing the items to be ordered

Purchase Requisition

return of unsatisfactory goods

Purchase Return

After a supplier of merchandise is selected, the purchasing department issues a form called:

Purchase order

What form is sent to the supplier to order goods?

Purchase order

an order to the supplier of goods specifying items needed, quantity, price, and credit terms

Purchase order

When the sales department needs goods, what document is sent to the purchasing department?

Purchase requisition

a cash discount offered to the customer for payment within a specified period

Purchases Discount

a special journal used to record the purchase of goods on credit

Purchases Journal

Purchases of merchandise on credit should be recorded in :

Purchases journal

a form showing quantity and condition of goods received

Receiving Report

a cash discount offered by the supplier for payment within a specified period

Sales Discount

a supplier's billing document

Sales Invoice

a list of all balances owed to creditors

Schedule of accounts payable

I have a purchase requisition ready...what is my next step?

Send a Purchase Order to the supplier

An invoice dated March 15 for $4,000 shows credit terms 2/10, n/30. What do the credit terms mean?

The business will receive a 2 percent discount if the invoice is paid within 10 days. If the invoice is not paid within 10 days, the total amount is due within 30 days.

True or False: A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise.

True

True or False: Cash purchases of merchandise are not recorded in the purchases journal.

True

The freight in account should have a(n) ______ balance.

debit

On August 31, 2015, the general ledger of Forever 21 showed the following balances: Purchases: $188,000; Freight In, $6,500; Purchases Returns and Allowances, $8,000. What was the net delivered cost of purchases for August?

$186,500

On August 31, 2015, the general ledger of Forever 21 showed the following balances: Purchases: $188,000; Freight In, $6,500; Purchases Returns and Allowances, $8,000. What was the delivered cost of purchases for August?

$194,500

a subsidiary ledger that contains a separate account for each creditor

Accounts payable ledger

a discount offered by suppliers for payment received within a specified period of time

Cash discount

the actual cost to the business of the merchandise sold to customers

Cost of goods sold