Question 1

When using a subsidiary ledger, the Accounts Payable account in the general ledger is called the

Accepted Answer

A)  master account. 
B)  subsidiary account. 
C)  receivable account. 
D)  controlling account. 
A)  master account. 
B)  subsidiary account. 
C)  receivable account. 
D)  controlling account.

Question 2

On June 15, Paradise Park purchased merchandise for the race track. The invoice was for $4,500, terms 2/10, n/30. On June 20, Paradise Park returned $200 of merchandise for credit. On June 25, it paid the amount owed. Fill in the blanks below.
a. The debit to Inventory on June 15 is ________.
b. The credit to Accounts Payable on June 15 is ________.
c. The credit to Inventory on June 20 is ________.
d. The credit to Cash on June 25 is ________.
e. The credit to Inventory on June 25 is ________.

Accepted Answer

a. $4,500

Question 3

Credit terms of 2/10, n/30 mean that

Accepted Answer

A)  2% discount is allowed if the bill is paid within 10 days, or the entire amount is due within 30 days. 
B)  a discount is allowed if the bill is paid within 30 days. 
C)  a discount is allowed if the bill is paid after 10 days. 
D)  a 2% discount is allowed if the customer pays the bill within 30 days. 
A)  2% discount is allowed if the bill is paid within 10 days, or the entire amount is due within 30 days. 
B)  a discount is allowed if the bill is paid within 30 days. 
C)  a discount is allowed if the bill is paid after 10 days. 
D)  a 2% discount is allowed if the customer pays the bill within 30 days.

Question 4

A characteristic of Inventory is that

Accepted Answer

A)  it has a debit normal balance. 
B)  it reduces net income. 
C)  it is used to record the purchase of merchandise to be resold. 
D)  A and C are correct. 
A)  it has a debit normal balance. 
B)  it reduces net income. 
C)  it is used to record the purchase of merchandise to be resold. 
D)  A and C are correct.

Question 5

Marcel's Fashions started with $7,000 in Inventory and had the following transaction totals for the month of April:
Sales $20,000
Sales Returns and Allowances 2,000
Cost of Goods Sold 8,000
Purchases ???
Freight 1,000
Purchases Returns and Allow. 2,000
Purchases Discounts 1,500
If ending Inventory for the period is $14,000, what is the total amount of purchases during the month?

Accepted Answer

A)  $18,500 
B)  $15,500 
C)  $17,500 
D)  $16,500 
A)  $18,500 
B)  $15,500 
C)  $17,500 
D)  $16,500

Question 6

A buyer may not receive both a trade discount and a cash discount.

Accepted Answer

A) True 
 B)False

Question 7

Inventory is a(n)

Accepted Answer

A)  cost. 
B)  asset. 
C)  liability. 
D)  revenue. 
A)  cost. 
B)  asset. 
C)  liability. 
D)  revenue.

Question 8

May Flower Company has a starting Inventory of $14,600 and had the following transaction totals for the month. Use this information to answer the questions below.
Sales Returns and Allowances $300
Sales Discounts 200
Purchases 3,000
Sales 8,000
Cost of Goods Sold 6,600
Purchases Discount 300
Freight 600
Based on the above, ending Inventory is ________.

Accepted Answer

The answer of May Flower Company has a starting Inventory...

Question 9

How much money would Sanji Company have to pay if purchases on account were $600 plus $50 for freight and the debt was paid within the discount period with terms of 2/10, n/30?

Accepted Answer

A)  $637.60 
B)  $639.00 
C)  $637.40 
D)  $638.00 
A)  $637.60 
B)  $639.00 
C)  $637.40 
D)  $638.00

Question 10

The Accounts Receivable and Accounts Payable are both controlling accounts.

Accepted Answer

A) True 
 B)False

Question 11

An entry to record the payment to a vendor was correctly recorded and posted to the general ledger but was not posted to the subsidiary ledger. This error will cause

Accepted Answer

A)  net income to be overstated. 
B)  net income to be understated. 
C)  the accounts payable control account to not agree with the subsidiary ledger. 
D)  the accounts receivable control account to not agree with the subsidiary ledger. 
A)  net income to be overstated. 
B)  net income to be understated. 
C)  the accounts payable control account to not agree with the subsidiary ledger. 
D)  the accounts receivable control account to not agree with the subsidiary ledger.

Question 12

The term F.O.B. means

Accepted Answer

A)  free on board. 
B)  freight or bill. 
C)  freight order billing. 
D)  found on base. 
A)  free on board. 
B)  freight or bill. 
C)  freight order billing. 
D)  found on base.

Question 13

Jackson purchased $400 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period?

Accepted Answer

A)  $360 
B)  $408 
C)  $400 
D)  $392 
A)  $360 
B)  $408 
C)  $400 
D)  $392

When using a subsidiary ledger, the Accounts Payable account in the general ledger is called the

Credit terms of 2/10, n/30 mean that

A characteristic of Inventory is that

A buyer may not receive both a trade discount and a cash discount.

Inventory is a(n)

How much money would Sanji Company have to pay if purchases on account were $600 plus $50 for freight and the debt was paid within the discount period with terms of 2/10, n/30?

The Accounts Receivable and Accounts Payable are both controlling accounts.

An entry to record the payment to a vendor was correctly recorded and posted to the general ledger but was not posted to the subsidiary ledger. This error will cause

The term F.O.B. means

Jackson purchased $400 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period?

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

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

When using a subsidiary ledger, the Accounts Payable account in the general ledger is called the

Credit terms of 2/10, n/30 mean that

A characteristic of Inventory is that

A buyer may not receive both a trade discount and a cash discount.

Inventory is a(n)

How much money would Sanji Company have to pay if purchases on account were $600 plus $50 for freight and the debt was paid within the discount period with terms of 2/10, n/30?

The Accounts Receivable and Accounts Payable are both controlling accounts.

An entry to record the payment to a vendor was correctly recorded and posted to the general ledger but was not posted to the subsidiary ledger. This error will cause

The term F.O.B. means

Jackson purchased $400 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period?

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters