CHAPTER TEN

WHEN A BUSINESS REQUIRES THE SKILLS OF MORE THAN ONE PERSON AND NEEDS MORE CAPITAL THAN ONE OWNER CAN PROVIDE, IT SHOULD BE ORGANIZED AS A

Partnership

WHAT IS SOLD

The main difference between a service

business and a merchandising

business is?

GOING CONCERN

When a business keeps its accounting records on the

assumption that it will make money and continue in business indefinitely, it is

applying this accounting concept.

CASH CREDIT

ACCOUNTS PAYABLE DEBIT

A cash payments journal includes how many special amount columns and what are

they?

BUSINESS ENTITY

Keeping the reports and financial records of a

business separate from the personal records of the partners is an application of the accounting concept

DRAWINGPURCHASES

When merchandise is withdrawn by a partner,

the transaction will increase the balance of the ____ account and decrease

the balance of the ___ account

COST

The purchases account is classified as a ?

account

CASH OR MERCHANDISE

Assets taken out of a business for the

personal use of an owner are usually

CHECK

The source document for a cash purchase is a

SUPPLIES ACCOUNT

Supplies bought for use in a business are recorded in the

PURCHASE INVOICE

The source document for recording a

purchase on account transaction is a

DEBIT PURCHASESCREDIT ACCOUNTS PAYABLE

The entry to journalize a purchase of merchandise

on account is

SEPARATE

Accounts related to the cost of merchandise

are kept in a ? division in the general ledger

chart of accounts.

SUPPLIESACCOUNTS PAYABLE

Buying supplies on account increases the ?

account balance and increases the ? ? account balance.

GREATER

The selling price of merchandise must be ____ than the cost of merchandise for a business to make a

profit.

TEMPORARY

The cost account purchases in a ?

account.

DECREASES

A cash purchase transaction ? the

balance of the cash account.

ACCOUNTS PAYABLE

Which of these accounts has a normal

credit balance?

THE APPROPRIATE EXPENSE AND

OTHER ACCOUNTS AND CREDIT CASH

The entry to journalize a payment to replenish a petty cash fund is debit