=44. Merchandise Account.= The merchandise account is a real account formerly much used, but discarded by modern accountants. When used, this account is debited with all purchases of merchandise and credited with all sales. The account is also charged with all goods returned by our customers, and credited with all goods which we return to those from whom we have purchased them. Goods returned by our customers are charged at the prices at which they were purchased by the customers; consequently the debit side of the merchandise account does not furnish a true exhibit of our purchases; neither is the credit side a true exhibit of our sales. Since the merchandise account furnished no valuable information, other accounts which exhibit more vital statistics have been substituted. =45.= _Purchase account_ is one of the accounts substituted for the merchandise account. This account is charged with all purchases as represented by the footings of the purchase book or purchase journal. This completes the double entry, the separate purchases having been credited to the personal accounts of those from whom the goods were purchased. All returns or other similar deductions allowed on purchase invoices are charged to those from whom the purchases were made and credited to purchase account. The balance of the purchase account then shows the total net purchases. =46.= _Sales account_ takes the place of the credit side of the merchandise account. All sales as shown by the footings of the sales book are credited to the sales account, completing the double entry. All returns and allowances are likewise charged to the sales account. The balance of the sales account shows total net sales. SAMPLE TRANSACTIONS =47.= The following transactions, properly recorded in journal sales book, purchase book, and ledger, demonstrate the uses of the merchandise, purchase, and sales accounts explained in the preceding paragraphs: --Sept. 20-- Bought from American Furniture Co., Grand Rapids 2 #four-drawer V F cabinets $11.00 $22.00 4 #35 card sections 4.20 16.80 1 #35 top 1.75 1 #35 base 1.25 $41.80 ------ --21-- Bought from Morgan Printing Co., Chicago 5,000 #1 plain ruled #35 cards .90 4.50 3,000 #1 ledger " #35 " 1.50 4.50 2,000 #1 " " #46 " 2.00 4.00 13.00 ------ --22-- Sold to Ackers & Co., 224 Randolph St. 4 #35 sections 5.50 22.00 1 #35 top 2.25 1 #35 base 1.75 26.00 ------