Question 1

Net purchases are:

Accepted Answer

A) Purchases + Purchases Returns and Allowances. 
B) Purchases - Purchases Discount - Purchases Returns and Allowances. 
C) Purchases - Freight - Purchases Returns and Allowances. 
D) Purchases + Freight-in. 
A) Purchases + Purchases Returns and Allowances. 
B) Purchases - Purchases Discount - Purchases Returns and Allowances. 
C) Purchases - Freight - Purchases Returns and Allowances. 
D) Purchases + Freight-in.

Question 2

If a debit memorandum is issued, the buyer will reduce their accounts receivable.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) F.O.B. shipping point. 
B) F.O.B. destination. 
C) Freight-In. 
D) Purchases. 
A) F.O.B. shipping point. 
B) F.O.B. destination. 
C) Freight-In. 
D) Purchases.

Question 4

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

Accepted Answer

F.O.B. destination means the seller pays

Question 5

A purchase discount correctly taken was debited to Purchases 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) net income to not be affected. 
D) total assets to be overstated. 
A) net income to be overstated. 
B) net income to be understated. 
C) net income to not be affected. 
D) total assets to be overstated.

Question 6

A list of creditors with balances owed is called:

Accepted Answer

A) a schedule of accounts receivable. 
B) a schedule of accounts payable. 
C) a list of suppliers. 
D) a trade list. 
A) a schedule of accounts receivable. 
B) a schedule of accounts payable. 
C) a list of suppliers. 
D) a trade list.

Question 7

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.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 8

Purchase Discounts are taken on:

Accepted Answer

A) shipping expense. 
B) Purchases Returns and Allowances. 
C) Purchases. 
D) All of the above are correct. 
A) shipping expense. 
B) Purchases Returns and Allowances. 
C) Purchases. 
D) All of the above are correct.

Question 9

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

Accepted Answer

A) a debit to a liability and a credit to an asset. 
B) a debit to an asset and a credit to an asset. 
C) a debit to an expense and a credit to a liability. 
D) a debit to an expense and a credit to an asset. 
A) a debit to a liability and a credit to an asset. 
B) a debit to an asset and a credit to an asset. 
C) a debit to an expense and a credit to a liability. 
D) a debit to an expense and a credit to an asset.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Special journals are used to:

Accepted Answer

A) minimize the amount of entries monthly to the general ledger. 
B) easily summarize like-kind transactions. 
C) reduce the number of entries recorded in the general journal. 
D) All of the above are correct. 
A) minimize the amount of entries monthly to the general ledger. 
B) easily summarize like-kind transactions. 
C) reduce the number of entries recorded in the general journal. 
D) All of the above are correct.

Question 12

The freight paid on goods purchased F.O.B. Shipping Point was not recorded. This error will cause:

Accepted Answer

A) net income to be overstated. 
B) net income to be understated. 
C) net income to not be affected. 
D) total liabilities to be overstated. 
A) net income to be overstated. 
B) net income to be understated. 
C) net income to not be affected. 
D) total liabilities to be overstated.

Question 13

Purchased office supplies on account. This will be recorded with:

Accepted Answer

A) a debit to Accounts Payable and a credit to Supplies. 
B) a debit to Supplies and a credit to Supplies Expense. 
C) a debit to Supplies and a credit to Accounts Payable. 
D) a credit to Supplies and a debit to Purchases. 
A) a debit to Accounts Payable and a credit to Supplies. 
B) a debit to Supplies and a credit to Supplies Expense. 
C) a debit to Supplies and a credit to Accounts Payable. 
D) a credit to Supplies and a debit to Purchases.

Question 14

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

Accepted Answer

A) Cost of Goods Sold 
B) Supplies 
C) Merchandise Inventory 
D) Both A and C are correct. 
A) Cost of Goods Sold 
B) Supplies 
C) Merchandise Inventory 
D) Both A and C are correct.

Question 15

A characteristic of Purchases is:

Accepted Answer

A) it has a debit normal balance. 
B) it reduces net income. 
C) that it is used to record the purchase of merchandise to be resold. 
D) All of the above are correct. 
A) it has a debit normal balance. 
B) it reduces net income. 
C) that it is used to record the purchase of merchandise to be resold. 
D) All of the above are correct.

Question 16

The entry to record a payment on a $600 account within the 2% discount period would include a:

Accepted Answer

A) debit to Accounts Payable for $588. 
B) debit to Accounts Payable for $600. 
C) credit to Purchases for $588. 
D) debit to Cash for $600. 
A) debit to Accounts Payable for $588. 
B) debit to Accounts Payable for $600. 
C) credit to Purchases for $588. 
D) debit to Cash for $600.

Question 17

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 18

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10, n/30 when full payment was made within the discount period.
$ ________

Accepted Answer

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

Question 19

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

No entry needed; the

Question 20

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.
-

Accepted Answer

The answer of For each of the following, identify in...

Exam 10: Purchases and Cash Payments

Net purchases are:

If a debit memorandum is issued, the buyer will reduce their accounts receivable.

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

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

A purchase discount correctly taken was debited to Purchases at the time the entry was recorded. This error will cause:

A list of creditors with balances owed is called:

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. -

Purchase Discounts are taken on:

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

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

Special journals are used to:

The freight paid on goods purchased F.O.B. Shipping Point was not recorded. This error will cause:

Purchased office supplies on account. This will be recorded with:

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

A characteristic of Purchases is:

The entry to record a payment on a $600 account within the 2% discount period would include a:

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.

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10, n/30 when full payment was made within the discount period. $ ________

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. -

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: the Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters