Exam 7: Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Hardware Restoration had a purchase of $40,000, a purchase return of $10,000, and a purchase discount of $1,500. What is the impact on Inventory?

The accounts payable column total is posted to the accounts payable general ledger account at the end of the month.

On May 6, R. Alexander purchased merchandise for his jewelry store. The invoice was for $80,000 plus freight of $1,500, terms 1/15, n/30. On May 10, R. Alexander returned merchandise for $15,000 credit. On May 19, R. Alexander paid the amount owed. Answer the following questions: a. The credit to Accounts Payable on May 6 is ________. b. The debit to Inventory on May 6 is ________. c. The debit to Accounts Payable on May 10 is ________. d. The credit to Inventory on May 19 is ________. e. The credit to Cash on May 19 is ________.

Purchases discounts are usually an incentive for the customer to pay early.

The account used to record the buyer's shipping costs is

The buyer issues a debit memorandum to indicate that a previous purchase amount is being reduced because goods were returned or an allowance was requested.

Given below are the transactions for B. Stern Company. For each transaction state the account(s) to be debited and account(s) to be credited and indicate the journal in which each transaction should be recorded. Indicate (P) for purchase journal, (CP) for cash payments, or (GJ) for general journal in the column headed journal.

Debit	Credit	Journal
Supplies	Accts. Pay.	___P___	0.	Purchased supplies on account
________	________	________	a.	Purchased merchandise on account.
________	________	________	b.	Paid utilities expense.
________	________	________	c.	Purchased merchandise for cash.
________	________	________	d.	Returned half of goods purchased in a.
_______	________	________	e.	Showers made a withdrawal of cash.
________	________	________	f.	Purchased store equipment on account.
________	________	________	g.	Paid for purchases in a., less return within the period.

The entry to record a payment on a $500 account within the 2% discount period would include a

A list showing the ending balances owed to individual vendors is called a Schedule of Accounts Payable.

The Inventory account normally has a credit balance.

The seller issues a debit memorandum when granting a reduction in price to a customer.

On February 12, Clare purchased $350 of merchandise on account from Larsen's Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is

The purchasing department issues purchase orders.

The principal ledger containing all the balance sheet and income statement accounts is the

A debit memorandum decreases which account on the purchase's books?

Accounts of a single type (i.e., Accounts Payable) are kept in this form of ledger.

A form used in business to place an order for the buying of goods from a seller is

To prove the subsidiary ledger agrees with the Accounts Payable controlling account balance, complete a

The seller's sales invoice is the buyer's purchase invoice.

The arrangements between buyer and seller as to when payments for merchandise are to be made are called