| A | B |
|---|
| Taco Home paid cash for advertising $400. What is the Journal entry to record this transaction? | Debit Advertising Expense, $400; credit Cash, $400. |
| Valley Products paid cash to Carolina Distributors, $882; covering Purchase Invoice No. 1734 for (00, less a 2% discount, $18.00. What is the journal entry for Valley Poducts to record this transaction? | Debit Accounts Payable/Carolina Distributors, $900; credit Purchases Discount $18 and credit Cash $882. |
| Capital stock | Total shares of ownership in a corporation. |
| An organization with the legal rights of a person and which may be owned by many persons. | Corporation |
| Cash discount | A deduction that a vendor allows on the invoice amount to encourage prompt payment. |
| Special journal | A journal used to record only one kind of transaction. |
| Purchase invoice | An invoice used as a source document for recording a purchase on account transaction. |
| Each unit of ownership in a corporation. | Share of stock |
| Credit allowed for the purhase price of returned merchandise, resulting in a devrease in the customer's accounts payable. | Purchase return |
| Retail merchandising business | Each unit of ownership in a corporation. |
| An invoice used as a source document for recording a purchase on account transaction. | Purchase invoice |
| The purchases account is increased by a credit and decreased by a debit | False |
| Purchase Discount is increased by a credit. | True |
| Purchases Returns and Allowances is a contra account to Cost of Merchandise. | False |
| Trade discounts normally are recorded in the purchases discount account. | False |
