Accounting Chapter 9
A purchase of merchandise for cash would be posted: Individually to Purchases and individually to Accounts Payable Individually to Purchases As part of a column total to Purchases As part of column totals to Purchases and Accounts Payable
Individually to Purchases
Since contra accounts are offsets to their related accounts, contra account normal balances are
Opposite the normal balances of their related accounts
A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called a(n): perpetual inventory Inventory certification Audit verification Physical inventory
Physical inventory
An employee working with an account can trace a transaction back to the correct journal by using information in the:
Post ref. column
Supplies bought for use in a business are recorded in the: Supplies Expense account Supplies account Purchases account Cash account
Supplies Account
Credit limit
The maximum outstanding balance allowed to a customer by a vendor
Stockholder
The owner of one or more shares of stock
list price
The retail price listed in a catalog or on an Internet site
A corporation can own property, incur liabilities, and enter into contracts in its own name
True
A corporation exists independent of its owners
True
The periodic inventory method does not require records of the quantity and cost of individual goods
True
The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable
True
The petty cash account Cash Short and Over is a temporary account
true
Wholesale Merchandising Business
A business that buys and resells merchandise primarily to other merchandising business
cash discount
A deduction that a vendor allows on an invoice amount to encourage prompt payment
purchase order
A form requesting that a vendor sell merchandise to a business
requisition
A form requesting the purchase of merchandise
General Amount Column
A journal amount column that is not headed with an account title
Special Journal
A journal used to record only one kind of transaction
scehdule of accounts payable
A listing of vendor accounts, account balances, and the total amount due to all vendors
Periodic Inventory
A merchandise inventory evaluated at the end of a fiscal period
merchandising business
A merchandising business that sells to those who use or consume the goods
trade discount
A reduction in the list price granted to a merchandising business
controlling account
An account in a general ledger that summarizes all accounts in a subsidiary ledger
contra account
An account that reduces a related account on a financial statement
terms of sale
An agreement between a buyer and a seller about payment for merchandise
perpetual inventory
An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise
Corporation
An organization with the legal rights of a person which many persons or other corporations may own
A legal document that identifies basic characteristics of a corporation
Articles of Incorporation
The Purchases account is classified as a(n): Expense account Asset account Liability account Cost of goods sold account
Cost of goods sold account
To replenish a $300.00 petty cash fund, if the petty cash custodian had receipts totaling $224.00 and cash of $74.00 in the petty cash box, one part of the journal entry is a:
Debit to Cash Short and Over for $2.00
share of stock
Each unit of ownership in a corporation
A merchandising business places Purchases in the Operating Expenses section of the income statement
False
A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount
False
The contra account Purchases Discount has a normal debit balance
False
The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days
False
The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable
False
