Chapter 11 Journalizing Purchases and Cash Payments

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Chapter 11Journalizing Purchases and Cash
Payments
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Objectives

• Define accounting terms related to purchases and
  cash payments for a merchandising business
• Identify accounting concepts and practices
  related to purchases and cash payments for a
  merchandising business

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Objectives

• Analyze purchases and cash payments transactions
  for a merchandising business
• Journalize purchases and cash payments
  transactions for a merchandising business

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Terms

• Partnership a business in which two or more
  persons combine their assets and skills.
• Partner each member of a partnership.
• Merchandising Business a business that
  purchases and sells goods.
• Merchandise goods that a merchandising business
  purchases to sell.

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Terms

• Cost Of Merchandise The price a business pays
  for goods it purchases to sell.
• Markup the amount added to the cost of
  merchandise to establish the selling price.
• Vendor a business from which merchandise is
  purchased or supplies or other assets are bought.

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Terms

• Purchase On Account a transaction in which the
  merchandise purchased is to be paid for later.
• Invoice a form describing the goods sold, the
  quantity, and the price.
• Purchase Invoice an invoice used as a source
  document for recording a purchase on account
  transaction.

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Terms

• Terms Of Sale an agreement between a buyer and
  a seller about payment for merchandise.
• Correcting Entry a journal entry made to
  correct an error in the ledger.

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Using An Expanded Journal
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Purchase of Merchandise for Cash
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Purchase of Merchandise On Account
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Cash Payment For Supplies
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Buying Supplies On Account
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Cash Payment On Account
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Cash Payment Of An Expense
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Journal Entry To Record Withdrawal By A Partner
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Journal Entry To Record A Correcting Entry
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Summary of Entries for Purchases, Cash Payments,
and Other Transactions