True/False
Indicate whether the statement is true or
false.
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1.
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Revenue earned from the sale of merchandise includes both the cost of
merchandise and mark-up.
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2.
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Only the mark-up increases capital.
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3.
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A business from which merchandise is purchased, or supplies or other assets are
bought, is called a vendor.
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4.
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A deduction that a vendor allows on the invoice amount to encourage prompt
payment is called a rebate.
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5.
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A cash discount on purchases taken by a customer is called a sale.
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6.
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A journal amount column that is not headed with an account title is called an
untitled column.
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7.
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A reduction in the list price granted to customers is called a trade
reduction.
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8.
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The invoice amount is recorded only once in a purchases journal entry.
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9.
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Contra accounts' normal balances are opposite the normal balances of their
related accounts.
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10.
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Trade discounts are recorded as purchases discounts because they decrease the
recorded invoice amount.
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11.
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A petty cash on hand amount that is more than a recorded amount is called cash
over.
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Matching
Use the word list provided
below. Not all words will be used; some may be used multiple times. Copy and paste from the list.
Misspellings will be counted as incorrect.
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A. | special | G. | cost of merchandise | B. | contra account | H. | purchase on account | C. | batch
report | I. | retail
merchandising | D. | mark-up | J. | purchase invoice | E. | merchandise | K. | sale on account | F. | list
price |
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1.
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The retail price listed in a catalog or on an Internet site is called a(n)
____.
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2.
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The price a business pays for goods it purchases is called ____.
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3.
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Goods that a business purchases to sell are called a(n) ____.
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4.
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An invoice used as a source document for recording a purchase on account
transaction is called a(n) ____.
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5.
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A business that sells to those who use or consume the goods is called a(n) ____
business.
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6.
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A transaction in which the merchandise purchased is to be paid for later is
called a(n) ____.
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7.
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A ____ journal is used to record only one kind of transaction.
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8.
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A ____ reduces a related account on a financial statement.
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9.
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The amount added to the cost of merchandise to establish the selling price is
called ____.
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