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Vocabulary
Purchases Journal
Cash Payments Journal
Petty Cash
Purchase Returns and Allowances
100
A business that sells to those who use or consume the goods
Retail merchandising business
100
The purchases account is increased by a ....
Debit
100
The source document for a cash payment is usually ....
a check
100
A petty cash on hand amount that is less than a recorded amount
Cash Short
100
Credit allowed for the purchase price of returned merchandise, resulting in a decrease of the accounts payable
Purchase Return
200
A deduction that a vendor allows on the invoice amount to encourage prompt payment
Cash Discount or Purchase Discount
200
If a list price of an item is $1500 and the trade discount is 40% and the item is bought on account. What amount(s) goes in which journal?
$900 in the Purchases Journal
200
Explain the terms of sale 3/10, n/30
The customer may deduct 3% of the Invoice amount if payment is made within 10 days of the invoice date otherwise they must pay the total amount.
200
If actual petty cash on hand in $43 but the record shows that $45 should be on hand---The petty cash fund is.....
$2 short
200
Credit allowed for part of the purchase price of merchandise that is not returned, (usually credit is granted for the merchandise because of damage or some type of error) resulting in the decrease of an accounts payable
Purchase allowance
300
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances. Used as the source document for a return.
Debit Memorandum
300
Name the "clue words" for the purchases journal
Purchased Merchandise on Account;Bought merchandise on account;Received a Purchase Invoice for merchandise on account
300
An account that reduces a related account on a financial statement is called....
Contra Account
300
What is petty cash?
A petty cash fund is a locked box of maney that enables a business to pay cash for small expenses without writing a check
300
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances
Debit Memorandum
400
An organization with the legal rights of a person and which may be owned owned by many persons
Corporation
400
If merchandise is purchased for $1000 on August 1, with terms of sale 2/10, n/30, the amount due to the vendor on August 9 is...
$980
400
Paid cash on Account of Gulf Craft Supply $1000 less a 2% discount---Describe the transaction
Debit Accounts Payable $1000, Credit Purchases Discount for $20, Credit Cash for $980
400
A petty cash custodian had a $300 petty cash fund with receipts totaling $244 and cash of $54 in the petty cash box. 1. How much should there be in the cash box? 2. How much are they short or over? 3. Will that be a debit or credit to the cash short and over?
1. $56 2. $2 Short 3. Debit
400
What account does Purchase Returns and Allowances affect and how does it affect it?
Purchases Account--Decreases because it is a contra account
500
Each unit of ownership in a corporation
Share of stock
500
Merchandise with a list price of $1400 is purchased on account for $800 on August 1. Terms of sale are 2/10, n30. Payment is made on August 17. The amount paid should be ...
$800
500
Purchased Merchandise for Cash from Paris MFG Co. $1000, less a 60% trade discount.---Describe the transaction
Cash Payments Journal---Account Title--Purchases, General Debit $400, Cash Credit $400
500
Paid cash to replenish the petty cash fund $208.66: Office supplies $32.33, Advertising $50, Misc 128.50 Cash over $2.17-----Describe the transaction
Cash payments journal---Debit each Expense separately in the General Debit column, Credit the Cash over, Enter one amount for the $208.66 in the Cash credit column
500
Returned Merchandise to Crown Distributing $250. Describe the transaction....
General Journal--Debit Accounts Payable/Crown Distributing and credit Purchase Returns and Allowances for $250