Question 1

A cost account is treated the same as:

Accepted Answer

A) an asset. 
B) a contra-asset. 
C) a revenue. 
D) an expense. 
A) an asset. 
B) a contra-asset. 
C) a revenue. 
D) an expense. D

Question 2

Jemco bought goods for $300 on credit.Jemco returned $50 worth of goods.Terms of the sale were 2/10,n/30.If Jemco pays the amount owed within the discount period,what is the amount they should pay?

Accepted Answer

A) $300 
B) $255 
C) $245 
D) $250 
A) $300 
B) $255 
C) $245 
D) $250 C

Question 3

Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use?

Accepted Answer

A) Purchased merchandise on account 
B) Purchased merchandise for cash 
C) Purchased office supplies for cash 
D) Returned merchandise inventory for credit 
A) Purchased merchandise on account 
B) Purchased merchandise for cash 
C) Purchased office supplies for cash 
D) Returned merchandise inventory for credit C

Question 4

When the term F.O.B.shipping point is used,title passes:

Accepted Answer

A) when goods reach the halfway point. 
B) when goods reach the destination. 
C) when goods are shipped. 
D) when the buyer signs for the product. 
A) when goods reach the halfway point. 
B) when goods reach the destination. 
C) when goods are shipped. 
D) when the buyer signs for the product.

Question 5

Jenny's Accessories bought 50 necklaces for $10 each on account.The invoice included a 2% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the return would include:

Accepted Answer

A) a debit to Accounts Payable for $50.00. 
B) a debit to Accounts Payable for $51.00. 
C) a debit to Purchases Returns and Allowances for $50.00. 
D) a debit to Purchases Returns and Allowances for $51.00. 
A) a debit to Accounts Payable for $50.00. 
B) a debit to Accounts Payable for $51.00. 
C) a debit to Purchases Returns and Allowances for $50.00. 
D) a debit to Purchases Returns and Allowances for $51.00.

Question 6

The Accounts Receivable and Accounts Payable are both controlling accounts.

Accepted Answer

A) True 
 B)False

Question 7

The entry to record returned merchandise to Vine Company is:

Accepted Answer

A) debit Purchases Returns and Allowances;credit Accounts Receivable in the general ledger. 
B) debit Accounts Payable;credit Purchases. 
C) debit Accounts Payable/Vans Company in the accounts payable subsidiary ledger and debit Accounts Payable in the general ledger;credit Purchases Returns and Allowances. 
D) debit Purchases;credit Accounts Payable. 
A) debit Purchases Returns and Allowances;credit Accounts Receivable in the general ledger. 
B) debit Accounts Payable;credit Purchases. 
C) debit Accounts Payable/Vans Company in the accounts payable subsidiary ledger and debit Accounts Payable in the general ledger;credit Purchases Returns and Allowances. 
D) debit Purchases;credit Accounts Payable.

Question 8

On June 15,Pinky Park purchased merchandise for the race track.The invoice was for $5,000,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 Purchases on June 15 is ________.
b)The credit to Accounts Payable on June 15 is ________.
c)The credit to Purchases Returns and Allowances on June 20 is ________.
d)The credit to Cash on June 25 is ________.
e)The credit to Purchases Discount on June 25 is ________.

Accepted Answer

a)$5,000
b

Question 9

The Bixby Co.had the following transactions involving the purchase of merchandise.Prepare the necessary general journal entries.Any applicable freight costs are prepaid by the seller.The perpetual inventory method is in use.
  
-If the company uses special journals,all payments should be recorded on a:

Accepted Answer

A) cash receipts journal. 
B) cash payments journal. 
C) purchases journal. 
D) sales journal. 
A) cash receipts journal. 
B) cash payments journal. 
C) purchases journal. 
D) sales journal.

Question 10

Jack's Online Service on April 30 has the following account balances:
$$\begin{array} {| l | r| } 
\hline\text { Sales } & \$ 25,000 \
\hline \text { Sales Returns and Allowances } & 5,000 \
\hline \text { Purchases } & 20,000 \
\hline \text { Freight-In } & 1,000 \
\hline \text { Purchases Returns and Allow. } & 2,000 \
\hline \text { Purchases Discounts } & ? ? ? \
\hline
\end{array}$$
If net purchases for the period are $15,000,what is the amount in the Purchases Discounts account?

Accepted Answer

A) $3,000 
B) $4,000 
C) $2,000 
D) $1,000 
A) $3,000 
B) $4,000 
C) $2,000 
D) $1,000

Question 11

A characteristic of Purchases is:

Accepted Answer

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

Question 12

Journalize the following transactions.All purchases are on account and subject to terms of 2/10,n/30.The periodic inventory method is used.
 Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc.
Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$.
Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co.
Nov. 10 Paid the amount due to Bartkouski Inc.
Nov. 12 Paid the amount due to Thiesman and Co.
Nov. 23 Paid the amount due to Montana Supply Co.
-Journalize the Nov.10 transaction.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of Journalize the following transactions.All purchases are on...

Question 13

The Bixby Co.had the following transactions involving the purchase of merchandise.Prepare the necessary general journal entries.Any applicable freight costs are prepaid by the seller.The perpetual inventory method is in use.
  
-Special journals are used to:

Accepted Answer

A) minimize the amount of entries posted monthly to the general ledger. 
B) easily summarize like-kind transactions. 
C) reduce the number of entries recorded in the general journal. 
D) All of the above are correct. 
A) minimize the amount of entries posted monthly to the general ledger. 
B) easily summarize like-kind transactions. 
C) reduce the number of entries recorded in the general journal. 
D) All of the above are correct.

Question 14

Jackson purchased $500 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) $450 
B) $510 
C) $500 
D) $490 
A) $450 
B) $510 
C) $500 
D) $490

Question 15

Merchandise Inventory is what type of account?

Accepted Answer

A) Asset 
B) Liability 
C) Expense 
D) Contra-Asset 
A) Asset 
B) Liability 
C) Expense 
D) Contra-Asset

Question 16

The Purchases Returns and Allowances account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) Accounts Payable 
B) Purchases Returns and Allowances 
C) Sales Returns and Allowances 
D) Sales Discount 
A) Accounts Payable 
B) Purchases Returns and Allowances 
C) Sales Returns and Allowances 
D) Sales Discount

Question 18

Returned merchandise for credit under the perpetual inventory method.This will be recorded with:

Accepted Answer

A) a debit to Accounts Payable and a credit to Purchases Returns and Allowances. 
B) a debit to Purchase Returns and Allowances and a credit to Merchandise Inventory. 
C) a credit to Accounts Payable and a debit to Merchandise Inventory. 
D) a debit to Accounts Payable and a credit to Merchandise Inventory. 
A) a debit to Accounts Payable and a credit to Purchases Returns and Allowances. 
B) a debit to Purchase Returns and Allowances and a credit to Merchandise Inventory. 
C) a credit to Accounts Payable and a debit to Merchandise Inventory. 
D) a debit to Accounts Payable and a credit to Merchandise Inventory.

Question 19

When merchandise is bought for resale,which of the following accounts would be decreased?

Accepted Answer

A) Store Equipment 
B) Purchases 
C) Cash 
D) Capital 
A) Store Equipment 
B) Purchases 
C) Cash 
D) Capital

Question 20

Purchases discounts:

Accepted Answer

A) decrease net income. 
B) increase net income. 
C) increase accounts payable. 
D) Not enough information provided. 
A) decrease net income. 
B) increase net income. 
C) increase accounts payable. 
D) Not enough information provided.

Exam 10: Purchases and Cash Payments

A cost account is treated the same as:

Jemco bought goods for $300 on credit.Jemco returned $50 worth of goods.Terms of the sale were 2/10,n/30.If Jemco pays the amount owed within the discount period,what is the amount they should pay?

Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use?

When the term F.O.B.shipping point is used,title passes:

Jenny's Accessories bought 50 necklaces for $10 each on account.The invoice included a 2% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the return would include:

The Accounts Receivable and Accounts Payable are both controlling accounts.

The entry to record returned merchandise to Vine Company is:

A characteristic of Purchases is:

The Bixby Co.had the following transactions involving the purchase of merchandise.Prepare the necessary general journal entries.Any applicable freight costs are prepaid by the seller.The perpetual inventory method is in use. -Special journals are used to:

Jackson purchased $500 of goods and received credit terms of 2/10,n/30.How much did he pay if payment was made during the discount period?

Merchandise Inventory is what type of account?

The Purchases Returns and Allowances account normally has a debit balance.

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

Returned merchandise for credit under the perpetual inventory method.This will be recorded with:

When merchandise is bought for resale,which of the following accounts would be decreased?

Purchases discounts:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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