Kế toán, kiểm toán - Chapter twelve: Introduction to merchandising businesses: purchases

CHAPTER TWELVEINTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASES 1. Apply the procedure for checking the accuracy of invoices. 2. Use an unpaid invoice file. 3. Explain the difference between FOB shipping point and FOB destination. 4. Demonstrate the procedure for handling purchases returns and allowances. 5. Compute purchases discounts. INTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASESObjectives:3Purchasing MerchandiseBusinesses that purchase merchandise must have orderly procedures for checking the accuracy of invoices and for making prompt payments. 4Transportation ChargesWhen a business purchases merchandise, it may be required to pay transportation charges from the supplier’s warehouse. These charges are an added cost of the merchandise.5Purchase Returns and AllowancesWhen a business returns goods or receives an allowance, there is a decrease in the cost of its merchandise purchases.6Purchase DiscountsCash discounts are called sales discounts by the seller and purchases discounts by the buyer. The discounts apply to the cost of merchandise only.7Accounting TerminologyExtensionsFOB destinationFOB shipping pointFree on boardPurchase invoicePurchases discountsPurchases returns and allowances.Sales discounts Sales invoicesTickler fileUnpaid invoice file8Chapter SummaryA purchase invoice is a bill that a buyer receives for a purchase of merchandise.Invoices must be paid within the discount period to obtain the cash discount.9Chapter Summary (continued)An unpaid invoice file is used to keep track of due dates.FOB shipping point means that the purchaser must pay the transportation charges. FOB destination means that the seller must pay the transportation charges.10Chapter Summary (continued)Purchases returns and allowances decrease the cost of merchandise purchased.A credit memorandum shows that the supplier will reduce the purchaser’s account balance by the amount of the return or allowance.11Chapter Summary (continued)Purchases discounts apply only to the cost of merchandise. They are not allowed on transportation charges, sales tax, or returns and allowances.121. Purchases returns and allowances increase the cost of merchandise purchased.2. Invoices must be paid within the discount period to obtain the cash discount.3. A purchase invoice is a bill that a seller receives for a purchase of merchandise.Topic QuizAnswer the following true/false questions:TRUEFALSEFALSE13 Investigating on the InternetSources of information about purchases can be accessed at various corporate websites.As a research assignment, access an interesting website and report those sources of information that might concern purchases of merchandise.14(Return to Topic Quiz)1. Purchases returns and allowances increase the cost of merchandise purchased.FALSEPurchases returns and allowances decrease the cost of merchandise purchased.15(Return to Topic Quiz)3. A purchase invoice is a bill that a seller receives for a purchase of merchandise.FALSEA purchase invoice is a bill that a buyer receives for a purchase of merchandise.16