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Journalizing Purchases and Cash Payments

Introduction of an expanded 11 column journal for a partnership set up as a merchandising business. Introduction of what a partnership is consisted of and the advantages and disadvantages of a partnership. Introduction of what a merchandising business is, the cost of merchandise, mark up, vendors, invoices, and terms of sale. Introduction of the need for an 11 column journal and how to journalize purchasing merchandise for cash, purchasing merchandise on account and reviewing buying supplies for cash, buying supplies on account, paying cash for expenses, and paying cash to the different partners for their personal use.

AB
PartnershipA business in which two or more persons combine their assets and skills.
PartnerEach member of a partnership.
MerchandiseGoods that a merchandising business purchases to sell.
Cost of merchandiseThe price a business pays for goods it purchases to sell.
MarkupThe amount added to the cost of merchandise to establish selling price.
VendorA business from which merchandise purchased or supplies or other assets are bought.
Purchase on accountA transaction in which the merchandise purchased is to be paid for later.
InvoiceA form describing the goods sold, the quantity, and the price.
Purchase invoiceAn invoice used as a source document for recording a purchase on account transaction.
Terms of saleAn agreement between a buyer and a seller about payment for merchandise.
Correcting entryA journal entry made to correct an error in the ledger.

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