Accounting - Chapter 9

A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount.

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The petty cash account Cash Short and Over is a temporary account.

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A corporation can own property, incur liabilities, and enter into contracts in its own name.

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A corporation exists independent of its owners.

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The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.

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The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable.

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The contra account Purchases Discount has a normal debit balance.

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A merchandising business places Purchases in the Operating Expenses section of the income statement.

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The periodic inventory method does not require records of the quantity and cost of individual goods.

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The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable.

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