Question 1

A schedule of accounts payable is prepared from the list of accounts in the accounts receivable ledger.

Accepted Answer

A) True 
 B)False  False

Question 2

Major documents used in the purchasing process are the purchase requisition, purchase order, receiving report, and sales invoice.

Accepted Answer

A) True 
 B)False  False

Question 3

The terms on an invoice are 4/15, n/30. This means that

Accepted Answer

A)  a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice. 
B)  a discount of 15% will be allowed if payment is made with 4 days from the date of the invoice. 
C)  a discount of 4% will be allowed if payment is made by the 15th of the month. 
D)  a discount of 15% will be allowed if payment is made by the 4th day after the date of the invoice. 
A)  a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice. 
B)  a discount of 15% will be allowed if payment is made with 4 days from the date of the invoice. 
C)  a discount of 4% will be allowed if payment is made by the 15th of the month. 
D)  a discount of 15% will be allowed if payment is made by the 4th day after the date of the invoice. A

Question 4

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The net amount is

Accepted Answer

A)  $65. 
B)  $80. 
C)  $20. 
D)  $40. 
A)  $65. 
B)  $80. 
C)  $20. 
D)  $40.

Question 5

The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called

Accepted Answer

A)  purchases. 
B)  net purchases. 
C)  purchases returns and allowances. 
D)  cost of goods sold. 
A)  purchases. 
B)  net purchases. 
C)  purchases returns and allowances. 
D)  cost of goods sold.

Question 6

Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?

Accepted Answer

A)  COD 
B)  FOB shipping point 
C)  FOB destination 
D)  4/10, EOM 
A)  COD 
B)  FOB shipping point 
C)  FOB destination 
D)  4/10, EOM

Question 7

Match the terms with the definitions.
-An alphabetical or numerical listing of supplier accounts and balances, usually prepared at the end of the month.

Accepted Answer

A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount 
A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount

Question 8

A printed price of a manufacturer or wholesaler that is subject to trade discounts is called

Accepted Answer

A)  net price. 
B)  gross price. 
C)  list price. 
D)  retail price. 
A)  net price. 
B)  gross price. 
C)  list price. 
D)  retail price.

Question 9

Assume the gross amount of an invoice is $200 and a discount of 20% is allowed. The amount of the trade discount totals

Accepted Answer

A)  $20. 
B)  $65. 
C)  $40. 
D)  $80. 
A)  $20. 
B)  $65. 
C)  $40. 
D)  $80.

Question 10

Discounts from quoted prices which are contingent on prompt payment of invoices, within a stated discount period, are called cash discounts.

Accepted Answer

A) True 
 B)False

Question 11

If the terms of an invoice dated April 10 are 3/10, n/30, the invoice must be paid on or before April 20 in order to be entitled to a discount.

Accepted Answer

A) True 
 B)False

Question 12

Match the terms with the definitions.
-A separate ledger containing an individual account payable for each supplier.

Accepted Answer

A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount 
A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount

Question 13

An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. If the invoice is paid on April 14, the amount to be paid would be

Accepted Answer

A)  $4.75. 
B)  $23.75. 
C)  $232.75. 
D)  $237.50. 
A)  $4.75. 
B)  $23.75. 
C)  $232.75. 
D)  $237.50.

Question 14

Match the terms with the definitions.
-A reduction from the list or catalog price offered to different classes of customers.

Accepted Answer

A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount 
A) accounts payable ledger 
B) cost of goods sold 
C) FOB destination 
D) FOB shipping point 
E) gross profit
F)purchase invoice
G)purchase order
H)purchase requisition
I)purchases
J)receiving report
K)schedule of accounts payable
L)trade discount

Question 15

FOB shipping point means free on board at destination of the shipment.

Accepted Answer

A) True 
 B)False

Question 16

A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment is commonly referred to by the seller as the

Accepted Answer

A)  sales invoice. 
B)  purchase invoice. 
C)  receiving report. 
D)  purchase requisition. 
A)  sales invoice. 
B)  purchase invoice. 
C)  receiving report. 
D)  purchase requisition.

Question 17

Merchandise inventory at the beginning of the period minus purchases plus merchandise inventory at the end of the period equals cost of goods sold for the period.

Accepted Answer

A) True 
 B)False

Question 18

The following information was taken from the accounting records of Bay Village Paving Co. for the month of January, 20--: $\begin{array}{lr}
\text { Sales } & \$ 857,000 \
\text { Sales Returns and Allowances } & 1,876 \
\text { Sales Discounts } & 627 \
\text { Purchases } & 378,000 \
\text { Purchases Returns and Allowances } & 9,560 \
\text { Purchases Discounts } & 2,760 \
\text { Freight-In } & 3,700 \
\text { Merchandise Inventory, January 1 } & 111,000 \
\text { Merchandise Inventory, January 31 } & 106,000
\end{array}$ Complete a partial income statement for the month of January, showing gross profit.

Accepted Answer

The answer of The following information was taken from the...

Question 19

Using the following information, determine the (a) cost of goods sold (show your work) and (b) gross profit. $\begin{array}{lr}
\text { Net sales } & \$ 198,000 \
\text { Purchases } & 92,000 \
\text { Purchases returns and allowances } & 1,800 \
\text { Purchases discounts } & 1,250 \
\text { Freight-in } & 1,590 \
\text { Merchandise inventory, beginning of period } & 63,000 \
\text { Merchandise inventory, end of period } & 37,000
\end{array}$

Accepted Answer

The answer of Using the following information, determine the (a)...

Question 20

A form used to request the responsible person or department to purchase merchandise or other property is known as a

Accepted Answer

A)  purchase invoice. 
B)  receiving report. 
C)  purchase requisition. 
D)  purchase order. 
A)  purchase invoice. 
B)  receiving report. 
C)  purchase requisition. 
D)  purchase order.

Exam 11: Accounting for Purchases and Cash Payments

A schedule of accounts payable is prepared from the list of accounts in the accounts receivable ledger.

Major documents used in the purchasing process are the purchase requisition, purchase order, receiving report, and sales invoice.

The terms on an invoice are 4/15, n/30. This means that

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The net amount is

The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called

Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?

Match the terms with the definitions. -An alphabetical or numerical listing of supplier accounts and balances, usually prepared at the end of the month.

A printed price of a manufacturer or wholesaler that is subject to trade discounts is called

Assume the gross amount of an invoice is $200 and a discount of 20% is allowed. The amount of the trade discount totals

Discounts from quoted prices which are contingent on prompt payment of invoices, within a stated discount period, are called cash discounts.

If the terms of an invoice dated April 10 are 3/10, n/30, the invoice must be paid on or before April 20 in order to be entitled to a discount.

Match the terms with the definitions. -A separate ledger containing an individual account payable for each supplier.

An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. If the invoice is paid on April 14, the amount to be paid would be

Match the terms with the definitions. -A reduction from the list or catalog price offered to different classes of customers.

FOB shipping point means free on board at destination of the shipment.

A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment is commonly referred to by the seller as the

Merchandise inventory at the beginning of the period minus purchases plus merchandise inventory at the end of the period equals cost of goods sold for the period.

A form used to request the responsible person or department to purchase merchandise or other property is known as a

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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