Textbook Notes (362,870)
Canada (158,081)
MGAB01H3 (126)
Liang Chen (50)
Chapter 5.2

Chapter 5.2

2 Pages
Unlock Document

University of Toronto Scarborough
Financial Accounting
Liang Chen

Chapter 5.2 Recording Purchases of Merchandise Purchases are recorded by the buyer when the goods are received from the seller. When orders are placed with a supplier, each order is documented with a purchase order. Cash purchases are supported by a cash register receipt. Credit purchases should be supported by a purchase invoice that indicated the total purchase price and other relevant information. Sales Taxes Sales taxes are collected on the goods and services sold by companies. When companies purchase goods for resale, GST is charged. However, because GST is offset by the GST they collect from customers; GST is not part of the cost of the merchandise. PST is never charged to the merchandiser, only to the final consumer. Freight Costs The invoice should indicate whether the seller or buyer is paying for the transportation costs of the goods. Freight terms discuss who is in charge of costs and who is responsible for damages during transportation. FOB (free on board) shipping point means the buyer of the goods is responsible, while FOB destination means the seller is responsible. Note that if the buyer of the goods is responsible, the cost
More Less

Related notes for MGAB01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.