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Recording Purchases - shipment of merchandise worth $1,000...

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Recording Purchases Under the periodic system, a temporary expense account named  merchandise purchases , or simply  purchases , is used to record the purchase of goods intended for resale. The source documents used  to journalize merchandise purchases include the seller's invoice, the company's purchase order, and  a receiving report that verifies the accuracy of the inventory quantities. When Music World receives a 
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Unformatted text preview: shipment of merchandise worth $1,000 on account from Music Suppliers, Inc., Music World increases (debits) the purchases account for $1,000 and increases (credits) accounts payable for $1,000. For reference purposes, the journal entry's description usually includes the invoice number....
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