Vocabulary I
Total share of ownership of a corporation.
What is capital stock?
Merchandise purchased on account is recorded in this special journal.
What is the Purchases Journal?
Purchases Returns and Allowances has this effect on the Purchases account.
Causes it to decrease?
Name the journal and then list the debit and credit entry. January 1 - Paid cash for rent, $500.
What is Cash Payments journal. Debit - Rent Expense Credit - Cash
Name the journal and then list the debit and credit entry. March 2 - Paid cash for telephone bill, $50.
What is the Cash Payments Journal? Debit - Utilities Expense Credit - Cash
A merchandising business that sells to those who use or consume the goods. (3 words)
What is a retail merchandising business?
An organization with the legal rights of a person and which may be owned by many persons.
What is a corporation?
This is the source document for a cash purchase.
What is a check?
Name the journal and then list the debit and credit entry. January 5 Purchased merchandise on account from Sam's Club, $100.
What is Purchases Journal? Debit - Purchases Credit - A/P (Sam's Club)
Name the journal and then list the debit and credit entry. January 1 - Purchased merchandise on account from Staples, $700.
What is Purchases Journal. Debit - Purchases Credit - A/P (Staples)
A journal used to record only ONE type of transaction is called what type of journal?
What is a special journal?
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances.
What is debit memorandum?
The Purchases Returns and Allowances account is classified as this type of an account.
What is a contra account?
Returned merchandise to Sam's Club, $50. (purchased on acct.)
What is General Journal. Debit - A/P/Sam's Club, $50 (need / in PR column) Credit - Purchases Returns & Allowances, $50.
Name the journal and then list the debit and credit entry. Returned merchandise to Staples, $75. (purchased on acct.)
What is General Journal. Debit - A/P / Staples (put a / in Post Ref) Credit - Purchases Returns & Allowances
Each unit of ownership of a corporation.
What is a share of stock?
A deduction that a vendor allows on the invoice amount to encourage prompt payment.
What is a cash discount?
In this chapter we learned about contra accounts. Give one example of a contra account.
What is a Purchases Discount or Purchases Returns and Allowances?
Name the journal and then list the debit and credit entry. Paid cash to Fran's Wholesale for merchandise, $100, less 40% trade discount.
What is a Cash Payments Journal Debit - Purchases Credit - Cash
Name the journal and then list the debit and credit entry. Paid cash to Freddy's Wholesale for merchandise, $10,000, less 30% trade discount.
What is Cash Payments Journal. Debit - Purchases $7,000 Credit - Cash $7,000
An invoice used as a source document for recording a purchase on account transaction.
What is a purchase invoice?
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable.
What is a purchases return?
The accounting concept that is applied when purchases are recorded at their cost, including any related shipping costs and taxes.
What is historical cost?
Name the journal and then list the debit and credit entry. Paid cash on account to Star Brite Wholesale, $490, covering P50 for $500, less 2% discount, $10.
What is Cash Payments Journal. Debit - A/P Star Brite Wholesale, $500 Credit - Purchases Discount, $10 Credit - Cash, $10
Name the journal and then list the debit and credit entry. Paid cash on account to Wally's Wholesale Club, $98, covering P60 for $100, less 2% discount, $2.
What is Cash Payments Journal? Debit - A/P Wally's Wholesale Club, $100 Credit - Purchases Discount, $2 Credit - Cash, $98.