Exam 10: Purchases and Cash Payments

Determine the total cost of a purchase paid for within the discount period with an invoice price of $7,000 and credit terms of 2/10, 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. $ ________

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 given to the buyer from the supplier for early payment on account.

Returned merchandise for credit under the perpetual inventory method. This will be recorded with:

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. 3 transaction.

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 25.

An invoice approval form is used by accounting to check the invoice before approving it for payment.

The controlling account is found in the subsidiary ledger for all accounts payable.

The accounts payable subsidiary ledger:

A form used with a business by the requesting department asking the purchasing department to buy specific goods is called a:

A cost account is treated the same as:

Heidi's Accessories bought 50 necklaces for $10 each on account. The invoice included a 6% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the payment (within the discount period)would include:

The term F.O.B. means:

The accounts payable subsidiary ledger should equal the control account in the general ledger.

Heidi's Accessories bought 50 necklaces for $10 each on account. The invoice included a 6% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include:

The seller's sales invoice is the buyer's purchase invoice.

Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use?

When merchandise is bought for resale, which of the following accounts would be decreased?

When merchandise is bought for resale, which of the following accounts would be increased?

A receiving report is used to notify the company of the quantity and condition of the goods received.