Accounting for Purchases and Cash Payments: Introduction
Sales is the primary source of income for a merchandising business. In order to sell merchandise, however, a business first needs to purchase it. The purchase of merchandise depends upon the type of business transactions that will occur, and may differ from business to business.
This section explains purchase transactions for cash and on account. It also explains how to post an accounts payable subsidiary ledger form, record cash transactions, and journalize purchase transactions in a merchandising business.
The final part of this section defines the key terms used. Short questions, fill in the blanks, and multiple choice questions are given to test your reading and understanding.