Question 1

A discount on a purchase was debited to Merchandise Inventory and a credit to Accounts Payable 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)  total assets to be understated. 
D)  total assets to be overstated. 
A)  net income to be overstated. 
B)  net income to be understated. 
C)  total assets to be understated. 
D)  total assets to be overstated.

Question 2

Individual amounts are recorded during the month to the accounts payable ledger.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  Accounts Payable 
B)  Sales 
C)  Sales Discount 
D)  Accounts Receivable 
A)  Accounts Payable 
B)  Sales 
C)  Sales Discount 
D)  Accounts Receivable

Question 4

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 30.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

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

Question 5

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 14 transaction. __________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of Prepare the general journal entries to record...

Question 6

A receiving report includes:

Accepted Answer

A)  quantity received. 
B)  condition of goods. 
C)  goods received. 
D)  All of the above are correct. 
A)  quantity received. 
B)  condition of goods. 
C)  goods received. 
D)  All of the above are correct.

Question 7

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

Accepted Answer

A)  Sales Returns and Allowances 
B)  Merchandise Inventory 
C)  Accounts Receivable 
D)  Sales Discount 
A)  Sales Returns and Allowances 
B)  Merchandise Inventory 
C)  Accounts Receivable 
D)  Sales Discount

Question 8

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 Shelby.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

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

Question 9

Determine the amount to be paid within the discount period for purchase with an invoice price of $25,000, subject to credit terms of 2/10, n/30.
$ ________

Accepted Answer

The answer of Determine the amount to be paid within...

Question 10

The return of merchandise was recorded as a debit to Accounts Receivable and a credit to Merchandise Inventory. 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 11

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. 23 transaction.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

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

Question 12

Determine the total cost of a purchase paid for within the discount period with an invoice price of $7,000 and credit terms of 1/10, n/30 when $1,500 has already been returned for credit. The goods were purchased with freight terms of F.O.B shipping point and freight of $50.
$ ________

Accepted Answer

The answer of Determine the total cost of a purchase...

Question 13

Jack's Online Service on April 30 has the following transactions:   If Jack's pays the invoice in time to receive a 1% discount, what is the amount Jack owes?

Accepted Answer

A)  $28,710 
B)  $29,000 
C)  $31,680 
D)  $32,000 
A)  $28,710 
B)  $29,000 
C)  $31,680 
D)  $32,000

Question 14

An invoice approval form is used by the:

Accepted Answer

A)  purchasing department. 
B)  receiving department. 
C)  shipping department. 
D)  accounting department. 
A)  purchasing department. 
B)  receiving department. 
C)  shipping department. 
D)  accounting department.

Question 15

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 20.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

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

Question 16

When purchasing merchandise inventory:

Accepted Answer

A)  a debit entry is made to Merchandise Inventory. 
B)  no entry is needed. 
C)  a credit entry is made to Accounts Payable. 
D)  A and C are correct. 
A)  a debit entry is made to Merchandise Inventory. 
B)  no entry is needed. 
C)  a credit entry is made to Accounts Payable. 
D)  A and C are correct.

Question 17

When a 2% discount is taken by a buyer, there is a(n):

Accepted Answer

A)  increase in assets. 
B)  decrease in assets. 
C)  increase accounts payable. 
D)  Not enough information provided. 
A)  increase in assets. 
B)  decrease in assets. 
C)  increase accounts payable. 
D)  Not enough information provided.

Question 18

Determine the amount to be paid to the vendor within the discount period for purchase with an invoice price of $6,000 and credit terms of 2/10, n/30 when $500 has already been returned for credit. The goods were purchased with freight terms of F.O.B shipping point and freight of $50 was included on the invoice.
$ ________

Accepted Answer

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

Question 19

John bought goods for $390 on credit. John returned $30 worth of goods. Terms of the sale were 5/10, n/30. If John pays the amount owed within the discount period, what is the amount they should pay? (Round intermediary and final calculations to the nearest whole dollar.)

Accepted Answer

A)  $390 
B)  $378 
C)  $342 
D)  $360 
A)  $390 
B)  $378 
C)  $342 
D)  $360

Question 20

Merchandise Inventory is what type of account?

Accepted Answer

A)  Asset 
B)  Liability 
C)  Expense 
D)  Cost 
A)  Asset 
B)  Liability 
C)  Expense 
D)  Cost

Exam 10: Purchases and Cash Payments

A discount on a purchase was debited to Merchandise Inventory and a credit to Accounts Payable at the time the entry was recorded. This error will cause:

Individual amounts are recorded during the month to the accounts payable ledger.

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

A receiving report includes:

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

Determine the amount to be paid within the discount period for purchase with an invoice price of $25,000, subject to credit terms of 2/10, n/30. $ ________

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

Determine the total cost of a purchase paid for within the discount period with an invoice price of $7,000 and credit terms of 1/10, n/30 when $1,500 has already been returned for credit. The goods were purchased with freight terms of F.O.B shipping point and freight of $50. $ ________

Jack's Online Service on April 30 has the following transactions: If Jack's pays the invoice in time to receive a 1% discount, what is the amount Jack owes?

An invoice approval form is used by the:

When purchasing merchandise inventory:

When a 2% discount is taken by a buyer, there is a(n):

John bought goods for $390 on credit. John returned $30 worth of goods. Terms of the sale were 5/10, n/30. If John pays the amount owed within the discount period, what is the amount they should pay? (Round intermediary and final calculations to the nearest whole dollar.)

Merchandise Inventory is what type of account?

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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