Question 1

Which of the following transactions will cause a liability to be credited and a cost account to be debited when the periodic inventory system is in use?

Accepted Answer

A) Recorded the adjustment for depreciation 
B) Recorded the adjustment for the consumption of supplies 
C) Purchased merchandise inventory on account 
D) Purchased office supplies on account 
A) Recorded the adjustment for depreciation 
B) Recorded the adjustment for the consumption of supplies 
C) Purchased merchandise inventory on account 
D) Purchased office supplies on account

Question 2

If a display rack was purchased for the store,which of the following accounts would be increased?

Accepted Answer

A) Store Equipment 
B) Purchases 
C) Capital 
D) None of the above is correct. 
A) Store Equipment 
B) Purchases 
C) Capital 
D) None of the above is correct.

Question 3

Purchases Discount:

Accepted Answer

A) is a contra-cost account. 
B) has a normal debit balance. 
C) decreases Net Income. 
D) All of the above are correct. 
A) is a contra-cost account. 
B) has a normal debit balance. 
C) decreases Net Income. 
D) All of the above are correct.

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

Heidi's Accessories bought 50 necklaces for $10 each on account.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the payment (within the discount period)would include:

Accepted Answer

A) a credit to Cash for $477. 
B) a credit to Cash for $468. 
C) a credit to Accounts Receivable for $477. 
D) a credit to Accounts Receivable for $468. 
A) a credit to Cash for $477. 
B) a credit to Cash for $468. 
C) a credit to Accounts Receivable for $477. 
D) a credit to Accounts Receivable for $468.

Question 6

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10,n/30 when full payment was made within the discount period.
$ ________

Accepted Answer

The answer of Determine the amount of credit to be...

Question 7

When using a perpetual inventory method,what account(s)must be updated when a sale is recognized?

Accepted Answer

A) Cost of Goods Sold 
B) Supplies 
C) Merchandise Inventory 
D) Both A and C are correct. 
A) Cost of Goods Sold 
B) Supplies 
C) Merchandise Inventory 
D) Both A and C are correct.

Question 8

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) the vendor account total in the subsidiary to be less than control total. 
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) the vendor account total in the subsidiary to be less than control total. 
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 9

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account in which the account balance is reported.
-$$\begin{array} { | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \
\hline \text { Purchases Discounts } & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 10

Tyler returned $500 of merchandise within the discount period.The entry to record the return is to:

Accepted Answer

A) debit Purchases for $500;credit Accounts Payable for $500. 
B) debit Purchases for $500;credit Purchases Returns and Allowances for $500. 
C) debit Accounts Payable/Suppliers Name for $500;credit Purchases Returns and Allowances for $500. 
D) debit to Accounts Payable for $500;credit Purchases Discount for $500. 
A) debit Purchases for $500;credit Accounts Payable for $500. 
B) debit Purchases for $500;credit Purchases Returns and Allowances for $500. 
C) debit Accounts Payable/Suppliers Name for $500;credit Purchases Returns and Allowances for $500. 
D) debit to Accounts Payable for $500;credit Purchases Discount for $500.

Question 11

The accounts payable subsidiary ledger:

Accepted Answer

A) lists accounts alphabetically. 
B) lists accounts for which the company owes money. 
C) has a controlling account in the general ledger. 
D) All of the above are correct. 
A) lists accounts alphabetically. 
B) lists accounts for which the company owes money. 
C) has a controlling account in the general ledger. 
D) All of the above are correct.

Question 12

The accounts payable subsidiary ledger should equal the control account in the general ledger.

Accepted Answer

A) True 
 B)False

Question 13

Returned merchandise under the periodic 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 Merchandise Inventory and a credit to Cash. 
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 Merchandise Inventory and a credit to Cash. 
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 14

Joyce's Accessories bought 60 necklaces for $10 each on account.The invoice included a 5% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the purchase would include:

Accepted Answer

A) a debit to Accounts Payable for $530. 
B) a debit to Accounts Payable for $500. 
C) a debit to Purchases for $630. 
D) a debit to Purchases for $500. 
A) a debit to Accounts Payable for $530. 
B) a debit to Accounts Payable for $500. 
C) a debit to Purchases for $630. 
D) a debit to Purchases for $500.

Question 15

The term F.O.B.means:

Accepted Answer

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

Question 16

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.
  
-Prepare the necessary general journal entry for June 25.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Bixby Co.had the following transactions involving...

Question 17

The return of merchandise was recorded as a debit to Accounts Receivable and a credit to Purchases Returns and Allowances.This error will cause:

Accepted Answer

A) net income to be overstated. 
B) net income to be understated. 
C) total liabilities to be understated. 
D) total assets to be overstated. 
A) net income to be overstated. 
B) net income to be understated. 
C) total liabilities to be understated. 
D) total assets to be overstated.

Question 18

If merchandise was bought for Cash,the same entry would be made on the company's books regardless of the type of inventory method is used.

Accepted Answer

A) True 
 B)False

Question 19

A purchase discount correctly taken was debited to Purchases at the time the entry was recorded.This error will cause:

Accepted Answer

A) net income to be overstated. 
B) net income to be understated. 
C) net income to not be affected. 
D) total assets to be overstated. 
A) net income to be overstated. 
B) net income to be understated. 
C) net income to not be affected. 
D) total assets to be overstated.

Question 20

A debit memorandum increases which account on the seller's books?

Accepted Answer

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

Exam 10: Purchases and Cash Payments

Which of the following transactions will cause a liability to be credited and a cost account to be debited when the periodic inventory system is in use?

If a display rack was purchased for the store,which of the following accounts would be increased?

Purchases Discount:

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.

Heidi's Accessories bought 50 necklaces for $10 each on account.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the payment (within the discount period)would include:

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10,n/30 when full payment was made within the discount period. $ ________

When using a perpetual inventory method,what account(s)must be updated when a sale is recognized?

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:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account in which the account balance is reported. - Column 1 Column 2 Column 3 Purchases Discounts

Tyler returned $500 of merchandise within the discount period.The entry to record the return is to:

The accounts payable subsidiary ledger:

The accounts payable subsidiary ledger should equal the control account in the general ledger.

Returned merchandise under the periodic inventory method.This will be recorded with:

Joyce's Accessories bought 60 necklaces for $10 each on account.The invoice included a 5% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the purchase would include:

The term F.O.B.means:

The return of merchandise was recorded as a debit to Accounts Receivable and a credit to Purchases Returns and Allowances.This error will cause:

If merchandise was bought for Cash,the same entry would be made on the company's books regardless of the type of inventory method is used.

A purchase discount correctly taken was debited to Purchases at the time the entry was recorded.This error will cause:

A debit memorandum increases which account on the seller's books?

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

Filters