1 / 16

CHAPTER TWELVE

CHAPTER TWELVE. INTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASES. INTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASES. Objectives:. 1. Apply the procedure for checking the accuracy of invoices. 2. Use an unpaid invoice file .

loe
Download Presentation

CHAPTER TWELVE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CHAPTER TWELVE INTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASES

  2. INTRODUCTION TO MERCHANDISING BUSINESSES: PURCHASES Objectives: 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.

  3. Purchasing Merchandise Businesses that purchase merchandise must have orderly procedures for checking the accuracy of invoices and for making prompt payments.

  4. Transportation Charges • When 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.

  5. Purchase Returns and Allowances • When a business returns goods or receives an allowance, there is a decrease in the cost of its merchandise purchases.

  6. Purchase Discounts • Cash discounts are called sales discounts by the seller and purchases discounts by the buyer. The discounts apply to the cost of merchandise only.

  7. Accounting Terminology • Purchases returns and allowances. • Sales discounts • Sales invoices • Tickler file • Unpaid invoice file • Extensions • FOB destination • FOB shipping point • Free on board • Purchase invoice • Purchases discounts

  8. Chapter Summary • Apurchase invoiceis a bill that a buyer receives for a purchase of merchandise. • Invoices must be paid within the discount period to obtain the cash discount.

  9. Chapter Summary (continued) • Anunpaid invoice fileis used to keep track of due dates. • FOB shipping pointmeans that the purchaser must pay the transportation charges.FOB destinationmeans that the seller must pay the transportation charges.

  10. Chapter Summary (continued) • Purchases returns and allowancesdecrease the cost of merchandise purchased. • Acredit memorandumshows that the supplier will reduce the purchaser’s account balance by the amount of the return or allowance.

  11. Chapter Summary (continued) • Purchases discountsapply only to the cost of merchandise. They are not allowed on transportation charges, sales tax, or returns and allowances.

  12. Topic Quiz Answer the following true/false questions: 1. Purchases returns and allowances increase the cost of merchandise purchased. FALSE 2. Invoices must be paid within the discount period to obtain the cash discount. TRUE 3. A purchase invoice is a bill that a seller receives for a purchase of merchandise. FALSE

  13. Investigating on the Internet Sources 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. 1. Purchases returns and allowances increase the cost of merchandise purchased. FALSE Purchases returns and allowances decrease the cost of merchandise purchased. (Return to Topic Quiz)

  15. 3. A purchase invoice is a bill that a seller receives for a purchase of merchandise. FALSE A purchase invoice is a bill that a buyer receives for a purchase of merchandise. (Return to Topic Quiz)

More Related