| A | B |
|---|
| If the actual petty cash on hand is $53.00 but the records show that it shoulbe be $55 the petty cash fund is said to be | short |
| Purchases Returns and Allows is a contra account to | Purchases |
| The accounting concept that is being applied when purchases are recorded at their cost, including any related shipping costs and taxes | Historical Cost |
| The terms of sale 1/10, n/30 mean | the customer may deduct 1% of the invoice amount if payment is made with 10 days, otherwise the full payment is due in 30 days |
| The Purchases account is increased | by a debit |
| Trade discounts are | not normally recorded in the purchases discount account |
| Purchases Discount is increased | by a credit |
| Purchases Returns and Allowances | decreased the amount of purchases |
| The Purchases account is classified as a | cost account |
| The source document for a cash purchase is a | check |
| If the source document is a check the transaction must be recorded in the | cash payments journal |
| The the source document is a purchase invoice the transaction must be recorded in the | purchases journal |
| If the source document is a memo or a debit memorandum the transaction must be recorded in the | general journal |
| Contra accounts--like Purchases Return and Allowances or Purchases Discount have normal account balance that are | opposite the normal balance of their related accounts |
| If the petty cash fund started with $300 and had $224 at the end of the month and there is actually $74 in the petty cash box | Petty Cash would be short--so you would debit Cash Short and Over |
| capital stock | Total shares of ownership in a corporation |
| cash discount | A deduction that a vendor allows on the invoice amount to encourage prompt payment |
| cash payments journal | A special journal used to record only cash payment transactions |
| contra account | An account that reduces a related account on a financial statement |
| cost of merchandise | The price a business pays for goods it purchases to sell |
| debit memorandum | A form prepared showing the price deduction taken by the customer for returns and allowances |
| list price | The retail price listed in a catalog or on an Internet site |
| markup | The amount added to the cost of merchandise to establish the selling price |
| purchase invoice | An invoice used as a source document for recording a purchase on account transaction |
| purchase on account | A transaction in which the merchandise purchased is to be paid for later |
| purchases discount | A cash discount taken on purchases taken by a customer |
| purchases returns | Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable |
| share of stock | Each unit of ownership in a corporation |
| stockholder | An owner of one or more shares of a corporation |
| terms of sale | An agreement between buyer and seller about payment for merchandise |
| trade discount | A reduction in the list price granted to customers |
| vendor | A business from which merchandise is purchased or supplies or other assets are bought |
