Vocabulary
When you hit the maximum outstanding balance you're allowed as a customer by your vendor, you've reached your ______.
What is a credit limit?
What is a Contra Account?
An account that reduces a related account on a financial statement.
Paid cash to Popular Radio for advertising, $820.00.
C319
Which accounts in the Cash Payment Journal would be debited/credited?
General (Advertising Expense) Debit -$820
Cash Credit -$820
When posting with a cash payment and accounts payable journals, which is more efficient, putting "9" or "CP9"?
CP9, because there are multiple journals and with CP9 you can easily tell which journal the information comes from.
What is the difference between a periodic inventory system and a perpetual inventory system?
With a periodic inventory system, the value of the inventory is determined by a physical count. With a perpetual inventory system, the value of the inventory on hand is determined by a continuous record of increases and decreases.
This is where you keep your list of assets, usually containing the value of individual items
What is an inventory?
What is an accounting system?
Seriously, this is from Chapter 1! You guys should know this!
It is a planned process designed to compile financial data and summarize the results in accounting records and reports
Purchased merchandise for cash from Fun Industries, $349.00 C344.
Which Accounts would be debited/credited in an Cash Payments Journal?
General Debit: $349
Cash Credit: $349
Does the Purchases Account have a normal Debit or Credit balance?
Normal Debit balance
What is the relationship between a controlling account and a subsidiary ledger?
A controlling account balance in a general ledger must be equal to the sum of all the account balances in a subsidiary ledger.
This legal document identifies basic characteristics of a corporation
What is the articles of incorporation?
What is a schedule of accounts payable?
It is a listing of vendor accounts, account balances, and the total amount due to all vendors.
Which accounts would be debited/credited in a Cash Payments journal for this transaction?
Paid Cash on Account to Electric Electronics $3484, minus 10% discount $348.40, C950.
Accounts Payable Debit $3484
Purchases Discount Credit $348.40
Cash Credit $3135.60
Does the Purchases Discount Account have a normal Credit or Debit balance?
Normal Credit balance
What is the difference between a trade discount, a cash discount, and a purchases discount?
Trade discount = reduction in list price granted to a merchandising business
Cash discount = deduction in the vendor allows to encourage a prompt payment.
Purchases discount = when a company that has purchased merchandise takes a cash discount