Question 1

Assume the gross amount of an invoice is $200 and a trade discount of 10% is allowed. The amount to be entered in the accounting records would be

Accepted Answer

A)  $20. 
B)  $220. 
C)  $200. 
D)  $180. 
A)  $20. 
B)  $220. 
C)  $200. 
D)  $180.

Question 2

The account to which transportation charges on incoming merchandise are generally entered is

Accepted Answer

A)  Freight-In. 
B)  FOB-In. 
C)  Freight-Out. 
D)  Delivery-In. 
A)  Freight-In. 
B)  FOB-In. 
C)  Freight-Out. 
D)  Delivery-In.

Question 3

A schedule of accounts payable is used to prove that the sum of the accounts payable ledger balances equals the Accounts Payable balance in the general ledger.

Accepted Answer

A) True 
 B)False

Question 4

(Appendix) The purchases discounts lost account is only used with the gross-price method of recording purchases.

Accepted Answer

A) True 
 B)False

Question 5

An account number in the Posting Reference column of the general journal indicates that the account has been posted to the general ledger.

Accepted Answer

A) True 
 B)False

Question 6

After the posting of the accounts payable ledger is completed, the total of the accounts payable ledger balances should equal the balance of which of the following general ledger accounts?

Accepted Answer

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

Question 7

Purchases Returns and Allowances is a contra-purchases account.

Accepted Answer

A) True 
 B)False

Question 8

Match the terms with the definitions.
-Transportation charges are paid by the seller.

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 9

(Appendix) When the net-price method of recording purchases is used, the debit to Purchases is for the

Accepted Answer

A)  full amount of the invoice. 
B)  amount of the invoice less available cash discounts. 
C)  amount actually paid on the invoice. 
D)  amount of the invoice plus available cash discounts. 
A)  full amount of the invoice. 
B)  amount of the invoice less available cash discounts. 
C)  amount actually paid on the invoice. 
D)  amount of the invoice plus available cash discounts.

Question 10

A form used to request the purchasing department to purchase merchandise or other property is known as a purchase order.

Accepted Answer

A) True 
 B)False

Question 11

Special discounts from list prices, granted by manufacturers to different classes of customers, are known as

Accepted Answer

A)  cash discounts. 
B)  trade discounts. 
C)  manufacturers' discount. 
D)  customers' discounts. 
A)  cash discounts. 
B)  trade discounts. 
C)  manufacturers' discount. 
D)  customers' discounts.

Question 12

Purchases Discounts is a contra-purchases account used to record cash discounts allowed on purchases.

Accepted Answer

A) True 
 B)False

Question 13

Match the terms with the definitions.
-The difference between net sales and cost of goods sold.

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 14

An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms on 3/10, n/30. If the invoice is not paid within the discount period, the amount that would be paid to satisfy the invoice would be

Accepted Answer

A)  $824.40. 
B)  $888.52. 
C)  $981.27. 
D)  $916.00. 
A)  $824.40. 
B)  $888.52. 
C)  $981.27. 
D)  $916.00.

Question 15

The supplier or vendor is the person or firm from whom the merchandise or other property is ordered.

Accepted Answer

A) True 
 B)False

Question 16

An invoice is never subject to both trade and cash discounts.

Accepted Answer

A) True 
 B)False

Question 17

(Appendix) If purchases are recorded at the net amount, assuming that all available cash discounts will be taken, the net-price method of recording the purchase has been used.

Accepted Answer

A) True 
 B)False

Question 18

In entering in the books an invoice that involves a trade discount, the amount to be used is the net amount after the trade discount is subtracted.

Accepted Answer

A) True 
 B)False

Question 19

A list showing the amount due to each supplier as of a specified date is known as the

Accepted Answer

A)  schedule of accounts receivable. 
B)  trial balance. 
C)  balance sheet. 
D)  schedule of accounts payable. 
A)  schedule of accounts receivable. 
B)  trial balance. 
C)  balance sheet. 
D)  schedule of accounts payable.

Question 20

For merchandising businesses, the term "purchases" refers only to merchandise acquired for resale.

Accepted Answer

A) True 
 B)False

Exam 11: Accounting for Purchases and Cash Payments

Assume the gross amount of an invoice is $200 and a trade discount of 10% is allowed. The amount to be entered in the accounting records would be

The account to which transportation charges on incoming merchandise are generally entered is

A schedule of accounts payable is used to prove that the sum of the accounts payable ledger balances equals the Accounts Payable balance in the general ledger.

(Appendix) The purchases discounts lost account is only used with the gross-price method of recording purchases.

An account number in the Posting Reference column of the general journal indicates that the account has been posted to the general ledger.

After the posting of the accounts payable ledger is completed, the total of the accounts payable ledger balances should equal the balance of which of the following general ledger accounts?

Purchases Returns and Allowances is a contra-purchases account.

Match the terms with the definitions. -Transportation charges are paid by the seller.

(Appendix) When the net-price method of recording purchases is used, the debit to Purchases is for the

A form used to request the purchasing department to purchase merchandise or other property is known as a purchase order.

Special discounts from list prices, granted by manufacturers to different classes of customers, are known as

Purchases Discounts is a contra-purchases account used to record cash discounts allowed on purchases.

Match the terms with the definitions. -The difference between net sales and cost of goods sold.

An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms on 3/10, n/30. If the invoice is not paid within the discount period, the amount that would be paid to satisfy the invoice would be

The supplier or vendor is the person or firm from whom the merchandise or other property is ordered.

An invoice is never subject to both trade and cash discounts.

(Appendix) If purchases are recorded at the net amount, assuming that all available cash discounts will be taken, the net-price method of recording the purchase has been used.

In entering in the books an invoice that involves a trade discount, the amount to be used is the net amount after the trade discount is subtracted.

A list showing the amount due to each supplier as of a specified date is known as the

For merchandising businesses, the term "purchases" refers only to merchandise acquired for resale.

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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