Accounting Theory and Practice Volume 3

Accounting Theory and Practice Volume 3

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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1922 edition. Excerpt: ... between green coffee merchants are usually for cash, the amount being based on a pro forma bill. Delivery of the purchase is effected by the transfer of warehouse receipts. Until the coffee has been graded and weighed, the true amount of the purchase cannot be determined. Hence, use is made of the pro forma invoice, in which the amount is based on the standard weight per bag and the grade is that named in the contract. The cash payment made is usually somewhat less than the amount so determined. When the true invoice is received, cash payment is made for the balance. To record spot purchases, a purchase register (Form 3) or creditors book, is used. Since the transaction is usually for cash, less 2%, and first payment is based on the pro forma invoice, with balance in 10 days, the use of three lines for each creditor and three money columns to record payment, causes this record to serve also as a subsidiary ledger. Entries in the record will usually show the debit for the initial cash payment several days before the credit appears, a few days being necessary to weigh and grade, and to receive the true invoice. At the end of the fiscal period, any open purchases on the register will be closed on the basis of the pro forma invoice, Purchases account being debited and Accounts Payable credited for the month's total. In the following month when the correct amount is known from the true invoice, another entry bearing the original invoice number is put through for the additional amount. The adjustment is made through the general journal when the true amount is less than the payment made on the pro forma amount. j: Marketing Coffee Coffee is marketed in various ways. The wholesaler may distribute his coffee to retailers either through brokers or through...show more

Product details

  • Paperback | 200 pages
  • 189 x 246 x 11mm | 367g
  • Rarebooksclub.com
  • Miami Fl, United States
  • English
  • black & white illustrations
  • 1236575806
  • 9781236575807