Exam 10: Purchases and Cash Payments

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 16, Purchased merchandise having a price of $6,000 from the Shelby Manufacturing Co. on account with credit terms 2/10, n/30. Transportation terms F.O.B destination. __________

(Essay)

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Question 61

The normal balance for Merchandise Inventory is:

(Multiple Choice)

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Question 62

The term used when the seller is responsible for the cost of freight is:

(Multiple Choice)

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Question 63

A characteristic of Merchandise Inventory is:

(Multiple Choice)

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Question 64

B & J Lumber Restoration purchased merchandise inventory of $53,000. If B and J returned merchandise inventory of $14,000 and was able to take a discount of 3%, what is the total amount owed?

(Multiple Choice)

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Question 65

Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This return will be recorded with:

(Multiple Choice)

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Question 66

Jeff purchased $550 of goods and received credit terms of 5/15, n/30. How much did he pay if payment was made during the discount period? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

(Multiple Choice)

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Question 67

Explain the difference between F.O.B. shipping point and F.O.B. destination.

(Essay)

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Question 68

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

(Essay)

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Question 69

A Schedule of Accounts Payable is a list of customer accounts that owe the company money.

(True/False)

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Question 70

An invoice approval form is used by accounting to check the invoice before approving it for payment.

(True/False)

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Question 71

In the perpetual system, freight charges added to the buyer's invoice are debited to ________ for the buyer.

(Multiple Choice)

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Question 72

Prepare the general journal entries to record the following transaction. All purchases are on account and subject to terms of 2/10, n/30. The perpetual inventory method is in use. May 5 Purchased merchandise from the Jackson Inc. with a price of $17,000. May 9 Returned $1,500 worth of merchandise to Jackson Inc. May 14 Paid the amount due to Jackson Inc. -Prepare the general journal entry for the May 5 transaction. __________

(Essay)

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Question 73

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 17. Received the goods from Ajax. __________

(Essay)

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Question 74

Tim returned $600 of merchandise within the discount period. The entry to record the return is to:

(Multiple Choice)

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Question 75

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

(Multiple Choice)

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Question 76

When a buyer returns merchandise that has been previously purchased, there is a(n):

(Multiple Choice)

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Question 77

Using the perpetual inventory system, the purchase of merchandise on account would include a:

(Multiple Choice)

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Question 78

The Accounts Receivable and Accounts Payable are both controlling accounts.

(True/False)

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Question 79

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

(Multiple Choice)

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Question 80

Exam 10: Purchases and Cash Payments

The normal balance for Merchandise Inventory is:

The term used when the seller is responsible for the cost of freight is:

A characteristic of Merchandise Inventory is:

B & J Lumber Restoration purchased merchandise inventory of $53,000. If B and J returned merchandise inventory of $14,000 and was able to take a discount of 3%, what is the total amount owed?

Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This return will be recorded with:

Jeff purchased $550 of goods and received credit terms of 5/15, n/30. How much did he pay if payment was made during the discount period? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Explain the difference between F.O.B. shipping point and F.O.B. destination.

A Schedule of Accounts Payable is a list of customer accounts that owe the company money.

An invoice approval form is used by accounting to check the invoice before approving it for payment.

In the perpetual system, freight charges added to the buyer's invoice are debited to ________ for the buyer.

Tim returned $600 of merchandise within the discount period. The entry to record the return is to:

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

When a buyer returns merchandise that has been previously purchased, there is a(n):

Using the perpetual inventory system, the purchase of merchandise on account would include a:

The Accounts Receivable and Accounts Payable are both controlling accounts.

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

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