Question 1

Trade discounts are recorded in the cash payments journal along with purchases discounts.

Accepted Answer

A) True 
 B)False  False

Question 2

It is a requirement that all suppliers must provide identical credit terms.

Accepted Answer

A) True 
 B)False  False

Question 3

On March 30, Bailey's Dog Bakery purchased $1,000 of merchandise on account from the Williams Company. The goods were shipped F.O.B. shipping point. The freight charge of $80 was paid by Williams Company and added to the invoice. The amount to record in the Accounts Payable account is

Accepted Answer

A)   $1,000.
B)   $990.
C)   $1,080.
D)   $1,070. C

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The value of inventory includes

Accepted Answer

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

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.

Question 7

Purchases of merchandise for cash are recorded in the purchases journal.

Accepted Answer

A) True 
 B)False

Question 8

Purchases Returns and Allowances

Accepted Answer

A)   increase Inventory.
B)   decrease Inventory.
C)   have no effect on Inventory.
D)   Not enough information provided.

Question 9

The purchases journal is used for

Accepted Answer

A)   recording cash payments.
B)   recording purchases of merchandise.
C)   recording credit sales.
D)   recording cash purchases.

Question 10

Tyler returned $400 of merchandise within the discount period. The entry to record the return is to

Accepted Answer

A)   debit Inventory for $400; credit Accounts Payable/Suppliers Name for $400.
B)   debit Inventory for $400; credit Cash for $400.
C)   debit to Accounts Payable/Suppliers Name for $400; credit Inventory for $400.
D)   debit to Accounts Payable/Suppliers Name for $400, credit Cash for $400.

Question 11

A list of creditors with ending balances 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.

Question 12

What is the self check that a person should implement after creating the schedule of accounts payable?

Accepted Answer

The answer of What is the self check that a...

Question 13

Payments of cash are recorded in the cash receipts journal.

Accepted Answer

A) True 
 B)False

Question 14

On November 30, Janoch's Dog Kennel purchased $500 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Ganster Company and added to the invoice. The amount to record as payable is

Accepted Answer

A)   $500.
B)   $540.
C)   $520.
D)   $550.

Question 15

Given below are the transactions for G. Turner Company. For each transaction state the account(s) to be debited and account(s) to be credited and indicate the journal in which each transaction should be recorded. Indicate (P) for purchase journal, (CP) for cash payments journal, or (GJ) for general journal.

Debit	Credit	Journal
Supplies	__Cash__	__CP___	0.	Purchased supplies for cash
________	________	________	a.	Withdrew $500 in cash from the business.
________	________	________	b.	Paid salaries expense, $800.
________	________	________	c.	Purchased merchandise for cash, $2,500.
________	________	________	d.	Purchased merchandise on account, $4,000.
_______	________	________	e.	Returned $1,000 of goods purchased in d.
________	________	________	f.	Paid two months' rent in advance, $600
________	________	________	g.	Paid for purchases in d., less discount and return.

Accepted Answer

The answer of Given below are the transactions for G....

Question 16

The term used when the purchaser is responsible for the cost of freight is

Accepted Answer

A)   F.O.B. shipping point.
B)   F.O.B. destination.
C)   F.O.B. seller.
D)   F.O.B. purchaser.

Question 17

Accounts of a single type are kept in this ledger.

Accepted Answer

A)   supplemental ledger.
B)   additional ledger.
C)   subsidiary ledger.
D)   None of these answers are correct.

Question 18

The accounts payable subsidiary ledger is organized in chronological order.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT a main type of Special Journal?

Accepted Answer

A)   Purchases Journal
B)   Personnel Journal
C)   Cash Receipts Journal
D)   Cash Payments Journal

Question 20

Ralph's Dairy started with $5,000 in Inventory and had the following transaction totals for the month: 
Sales $10,000
Sales Returns and Allowances 1,000
Cost of Goods Sold 5,500
Purchases 7,000
Freight 500
Purchases Returns and Allowances 1,000
Purchases Discounts 700
Based on the above, ending Inventory for the period is

Accepted Answer

A)   $4,300.
B)   $6,300.
C)   $5,300.
D)   $5,800.

Exam 7: Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Trade discounts are recorded in the cash payments journal along with purchases discounts.

It is a requirement that all suppliers must provide identical credit terms.

On March 30, Bailey's Dog Bakery purchased $1,000 of merchandise on account from the Williams Company. The goods were shipped F.O.B. shipping point. The freight charge of $80 was paid by Williams Company and added to the invoice. The amount to record in the Accounts Payable account is

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

The value of inventory includes

A list of creditors with balances owed is called

Purchases of merchandise for cash are recorded in the purchases journal.

Purchases Returns and Allowances

The purchases journal is used for

Tyler returned $400 of merchandise within the discount period. The entry to record the return is to

A list of creditors with ending balances is called

What is the self check that a person should implement after creating the schedule of accounts payable?

Payments of cash are recorded in the cash receipts journal.

On November 30, Janoch's Dog Kennel purchased $500 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Ganster Company and added to the invoice. The amount to record as payable is

The term used when the purchaser is responsible for the cost of freight is

Accounts of a single type are kept in this ledger.

The accounts payable subsidiary ledger is organized in chronological order.

Which of the following is NOT a main type of Special Journal?