Partnerships

A business in which two or more persons combine their skills and assets and are the owners.

Each member of the partnership is called a partner

Omni Import

Merchandising BusinessA business that purchases and sells goods.

Retail Merchandising BusinessA business that purchases and sells goods to the final consumer.

Wholesale Merchandising BusinessA business that buys and sells goods to retailers.

MerchandiseThe goods that are purchase by the business that will be sold.

Omni Import is a Retail Merchandising Business that is organized as a partnership and purchases and sells novelty gift items.

EXPANDED JOURNAL

Lesson 10-1, page 229Lesson 10-1, page 229

Omni has many non-cash and other frequent transactions. Therefore, they have added a number of special columns to help save time, space, and to create efficiency.

Purchasing MerchandiseCost of MerchandiseThe amount of money that a business pays for its goods to sell.

MarkupThe amount added to the cost of merchandise that creates the selling price. (To make a profit, the selling price must be greater than its cost)

VendorA business from which assets or other supplies for the business are purchased.

Purchases are a cost account and reduces capital which creates a normal debit balance.

PURCHASING MERCHANDISE FOR CASHNovember 1. Purchased merchandise for cash, $575.00 Check No. 290.

1. Which accounts are affected?

Purchases

Cash

4. How is each amount entered in the accounts?

Costs increase on the debit side.

Assets decrease on the credit side.

3. How is each classification changed?

Costs are increased.

Assets are decreased.

2. How is each account classified?

Purchases is a cost account.

Cash is an asset account. Cash

Purchases

DebitNormal Balance

DebitNormal Balance

575.00

575.00

Lesson 10-1, page 231Lesson 10-1, page 231

2. Place a check mark in the Account Title column to show that no account title is needed.

PURCHASING MERCHANDISE FOR CASH

5

1 3

42

3. Write the check number.

1. Write the date.

4. Place a check mark in the Post. Ref. column to show that amounts are not to be posted individually.

5. Write the debit amount.

6. Write the credit amount.

6

Lesson 10-1, page 231Lesson 10-1, page 231