Exam 23: The Voucher System

Laird Corporation bought $2,000 of merchandise from Woods Corporation,terms 2/10,n/30.The journal entry to record the payment under the net approach method after the discount period would be to:

Brooke's Company purchased $1,500 of merchandise with terms of 2/10,n/30 and paid the invoice within the discount period.If Brooke's uses the net method of recording merchandise purchases,the $30 purchases discount is recorded in:

Vouchers are recorded in alphabetical order.

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, in Column 3 the financial statement in which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). - Column 1 Column 2 Column 3 Column 4 Purchase discounts

Written authorizations for cash payments are called vouchers.

The entry to record payment of a voucher,for an invoice after the discount period,under the net method will include:

If the net approach method is applied,the purchase of $6,500 of merchandise with terms 3/20,n/60 is recorded by:

A voucher is made for every:

If it is later decided to pay an approved voucher in two payments:

If a purchase return or allowance occurs after the posting of the original voucher,the original voucher is cancelled.

Name and discuss the two most important internal control principles embedded in the voucher system.

Each entry in a voucher register includes a:

If the net approach method is applied,the purchase of $2,000 of merchandise with terms 2/10,n/30 is recorded by:

Given the following accounts: [1]Cash in bank [2]Petty cash [3]Supplies [4]Equipment [5]Notes payable [6]Vouchers payable [7]FICA payable [8]Wages payable [9]Purchases [10]Purchase discounts [11]Discounts lost [12]Repairs exp [13]Interest expense [14]Delivery expense Indicate the account(s) to be debited and credited to record the following transactions. -Paid voucher #424. Debit ________ & ________ & ________ Credit ________ & ________ & ________

After Crowe purchased $5,000 of merchandise from Hanks,Crowe discovered $400 of defective merchandise.Record the entry for the return (assume the gross method).

Given the following accounts: [1]Cash in bank [2]Petty cash [3]Supplies [4]Equipment [5]Notes payable [6]Vouchers payable [7]FICA payable [8]Wages payable [9]Purchases [10]Purchase discounts [11]Discounts lost [12]Repairs exp [13]Interest expense [14]Delivery expense Indicate the account(s) to be debited and credited to record the following transactions. -Prepared voucher #424 in the amount of $6,240 in reply to the payroll department's request for payment of last week's wages. Debit ________ & ________ & ________ Credit ________ & ________ & ________

On October 1,Oak Company purchased $12,000 of merchandise from City Seed Company,terms 2/10,n/30,and prepared voucher #222.Cottonwood paid the invoice on October 15. Required: Prepare journal entries to record the above transactions.Assume Oak uses the net approach method for recording purchases.

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, in Column 3 the financial statement in which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). - Column 1 Column 2 Column 3 Column 4 Equipment

In a voucher system,the controlling account in the general ledger is:

Given the following accounts: [1]Cash in bank [2]Petty cash [3]Supplies [4]Equipment [5]Notes payable [6]Vouchers payable [7]FICA payable [8]Wages payable [9]Purchases [10]Purchase discounts [11]Discounts lost [12]Repairs exp [13]Interest expense [14]Delivery expense Indicate the account(s) to be debited and credited to record the following transactions. -Prepared and recorded voucher #422 for the purchase of merchandise (gross method)of $5,000 with credit terms of 2/10,n/30. Debit ________ & ________ & ________ Credit ________ & ________ & ________