Ms. Cooley Accounting

An organization with the legal rights of a person and which may be owned by many persons

Each unit of ownership in a corporation

Total shares of ownership in a corporation

A form prepared by the customer showing the price deduction taken by the customer for returns and allowances

A merchandising business that sells to those who use or consume the goods

Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s accounts payable.

A cash discount on purchases taken by a customer

An invoice used as a source document for recording a purchase on account transaction

A deduction that a vendor allows on the invoice amount to encourage prompt payment

A journal used to record only one kind of transaction

TRUE or FALSE? When several journals are used, an abbreviation is used in the Post.Ref. column of a ledger to show the journal from which the posting is made

TRUE or FALSE? The purchases account is increased by a credit and decreased by a debit

TRUE or FALSE? Purchases Returns and Allowances is a contra account to Cost of Merchandise

TRUE or FALSE? Trade discounts normally are recorded in the purchases discount account

TRUE or FALSE? The terms of sale 1/10, n/30 mean that the customer may deduct 1% of the invoice amount if payment is made within 30 days of the invoice date

TRUE or FALSE? Purchases Discount is increased by a credit entry

TRUE or FALSE? If the actual petty cash on hand is $53.00 but the records show that $55.00 should be on hand, the petty cash fund is said to be over.

TRUE or FALSE? When purchases are recorded at their cost, including any related shipping costs and taxes, the Historical Cost accounting concept is being applied