Exam 10: Purchases and Cash Payments

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, and in Column 3 the financial statement that the account in which the account balance is reported. -

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used. -Journalize the Nov. 10 transaction.

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

Compare and contrast the controlling account Accounts Payable to the accounts payable subsidiary ledger. Discuss why the balance of the controlling account, Accounts Payable, does not equal the sum of the accounts payable ledger during the month.

On February 12, Clare purchased $400 of merchandise on account from Larsen's Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is:

Returned merchandise for credit on account. The perpetual inventory system is in use. This will be recorded with:

Tyler returned $500 of merchandise within the discount period. The entry to record the return is to:

Purchases:

The return of merchandise to the supplier for credit using the perpetual inventory system would include a:

Medeco bought goods for $250 on credit. Medeco returned $50 worth of goods. Terms of the sale were 2/10, n/30. If Medeco pays the amount owed within the discount period, what is the amount they should pay?

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, and in Column 3 the financial statement that the account in which the account balance is reported. -

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used. -Journalize the Nov. 7 transaction.

Purchases Discount:

A list showing the ending balances owed to individual creditors is called a Schedule of Accounts Payable.

The account used in perpetual inventory to record the cost of inventory used to make the sale is:

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

Purchases Discounts are not taken on freight costs.

Purchases Returns and Allowances:

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, and in Column 3 the financial statement that the account in which the account balance is reported. -

Returned merchandise paid for within the discount period for a Cash refund. This will be recorded with: