Question 1

When the term F.O.B. shipping point is used, title passes:

Accepted Answer

A) when goods reach the halfway point. 
B) when goods reach the destination. 
C) when goods are shipped. 
D) when the buyer unpacks the goods. 
A) when goods reach the halfway point. 
B) when goods reach the destination. 
C) when goods are shipped. 
D) when the buyer unpacks the goods.

Question 2

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 3

If the company uses special journals, all payments should be recorded on a:

Accepted Answer

A) cash receipts journal. 
B) cash payments journal. 
C) purchases journal. 
D) sales journal. 
A) cash receipts journal. 
B) cash payments journal. 
C) purchases journal. 
D) sales journal.

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 16, Purchased merchandise having a price of $9,000 from the Ajax Supply House on account with credit terms 2/10, n/30. Transportation terms F.O.B shipping point. The freight costs were $175.

Accepted Answer

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

Question 5

Jackie's Online Service on April 30 has the following account balances:   If net purchases for the period are $14,000, what is the amount of gross purchases?

Accepted Answer

A) $18,500 
B) $15,500 
C) $17,500 
D) $16,500 
A) $18,500 
B) $15,500 
C) $17,500 
D) $16,500

Question 6

R&R Lumber reports Purchases of $60,000. If Purchases Returns and Allowances are $6,000 and Purchases Discounts are $1,500, what are the net Purchases?

Accepted Answer

A) $54,000 
B) $52,500 
C) $67,500 
D) $58,500 
A) $54,000 
B) $52,500 
C) $67,500 
D) $58,500

Question 7

Before paying an invoice, the accounting department must check:

Accepted Answer

A) the purchase order. 
B) the invoice. 
C) the receiving report. 
D) All of the above are correct. 
A) the purchase order. 
B) the invoice. 
C) the receiving report. 
D) All of the above are correct.

Question 8

F.O.B. shipping point means:

Accepted Answer

A) the buyer pays for the freight. 
B) the seller pays for the freight. 
C) the title passes at time of shipment. 
D) Both A and C are correct. 
A) the buyer pays for the freight. 
B) the seller pays for the freight. 
C) the title passes at time of shipment. 
D) Both A and C are correct.

Question 9

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.

Accepted Answer

No entry needed; the

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Purchases is a(n):

Accepted Answer

A) cost. 
B) asset. 
C) liability. 
D) revenue. 
A) cost. 
B) asset. 
C) liability. 
D) revenue.

Question 12

When the terms are F.O.B. shipping point, the buyer is responsible for the cost of shipping from the seller's shipping point to the purchaser's location but the title does not pass until it is delivered.

Accepted Answer

A) True 
 B)False

Question 13

The normal balance for Purchases Returns and Allowances is:

Accepted Answer

A) a debit. 
B) a credit. 
C) It does not have a normal balance. 
D) zero. 
A) a debit. 
B) a credit. 
C) It does not have a normal balance. 
D) zero.

Question 14

Determine the amount to be paid to the vendor within the discount period for purchase with an invoice price of $3,000 and credit terms of 2/10, n/30 when $700 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 15

Payment for merchandise should not be made until approval is given.

Accepted Answer

A) True 
 B)False

Question 16

To prove the subsidiary ledger agrees with the Accounts Payable controlling account balance, complete a:

Accepted Answer

A) debit memorandum. 
B) schedule of accounts payable. 
C) purchase order. 
D) schedule of accounts receivable. 
A) debit memorandum. 
B) schedule of accounts payable. 
C) purchase order. 
D) schedule of accounts receivable.

Question 17

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

Accepted Answer

A) Accounts Payable 
B) Purchases Returns and Allowances 
C) Sales Returns and Allowances 
D) Accounts Receivable 
A) Accounts Payable 
B) Purchases Returns and Allowances 
C) Sales Returns and Allowances 
D) Accounts Receivable

Question 18

On June 15, Paradise Park purchased merchandise for the race track.. The invoice was for $4,500, terms 2/10, n/30. On June 20, Paradise Park returned $200 of merchandise for credit. On June 25, it paid the amount owed. Fill in the blanks below.
a)The debit to Purchases on June 15 is ________.
b)The credit to Accounts Payable on June 15 is ________.
c)The credit to Purchases Returns and Allowances on June 20 is ________.
d)The credit to Cash on June 25 is ________.
e)The credit to Purchases Discount on June 25 is ________.

Accepted Answer

a)$4,500
b

Question 19

Clothes' R Us bought some new clothes for its fashion line and is required to pay the freight costs. The freight terms are:

Accepted Answer

A) F.O.B. destination. 
B) F.O.B. shipping point. 
C) 3/10, n/30. 
D) None of these are correct. 
A) F.O.B. destination. 
B) F.O.B. shipping point. 
C) 3/10, n/30. 
D) None of these are correct.

Question 20

The recording of the cost of freight-in under the perpetual inventory system would include a:

Accepted Answer

A) debit to Freight-In. 
B) credit to Merchandise Inventory. 
C) debit to Merchandise Inventory. 
D) credit to Freight-In. 
A) debit to Freight-In. 
B) credit to Merchandise Inventory. 
C) debit to Merchandise Inventory. 
D) credit to Freight-In.

Exam 10: Purchases and Cash Payments

When the term F.O.B. shipping point is used, title passes:

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. -

If the company uses special journals, all payments should be recorded on a:

Jackie's Online Service on April 30 has the following account balances: If net purchases for the period are $14,000, what is the amount of gross purchases?

R&R Lumber reports Purchases of $60,000. If Purchases Returns and Allowances are $6,000 and Purchases Discounts are $1,500, what are the net Purchases?

Before paying an invoice, the accounting department must check:

F.O.B. shipping point means:

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

Purchases is a(n):

When the terms are F.O.B. shipping point, the buyer is responsible for the cost of shipping from the seller's shipping point to the purchaser's location but the title does not pass until it is delivered.

The normal balance for Purchases Returns and Allowances is:

Payment for merchandise should not be made until approval is given.

To prove the subsidiary ledger agrees with the Accounts Payable controlling account balance, complete a:

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

Clothes' R Us bought some new clothes for its fashion line and is required to pay the freight costs. The freight terms are:

The recording of the cost of freight-in under the perpetual inventory system would include a:

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