Question 1

Skiing International uses a perpetual inventory system when recording its purchases and sales of inventory. If the business purchases $8,000 of goods on account, select the correct entry to record the purchase:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 2

Match between columns
                        Premises:  An account used to record cost of goods purchased for resale during a period
 A form showing quantity and condition of goods received
 A list sent to the purchasing department showing the items to be ordered
 A list of all balances owed to creditors
 The actual cost to the business of the merchandise sold to customers
 An account showing transportation charges for items purchased
 An order to the supplier of goods specifying items needed, quantity, price, and credit terms

Accepted Answer

The Answer of Cost of goods sold and Freight In is...

Question 3

On April 30, 2019, the general ledger of the Danielle's Dress Shop showed the following balances: Purchases $18,000; Freight In, $1,500; Purchases Returns and Allowances, $2,130.
Determine the following:
A)What was the delivered cost of purchases for April?
B)What was the net delivered cost of purchases for April?

Accepted Answer

The answer of On April 30, 2019, the general ledger...

Question 4

The amount of Freight In for a period is reported on:

Accepted Answer

A) the balance sheet 
B) the statement of owner's equity 
C) the income statement. 
D) it is not reported on any statement.

Question 5

Check marks next to the individual amounts in the purchases journal mean that the amounts:

Accepted Answer

A) have been posted to the accounts payable subsidiary ledger. 
B) have been posted to the general ledger. 
C) have been posted to the accounts receivable subsidiary ledger. 
D) do not need to be posted to any account.

Question 6

For each of the transactions listed below, select the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal.
-Purchased merchandise with terms of net 30 days.

Accepted Answer

A) CR for cash receipts journal 
B) CP for cash payments journal 
C) S for sales journal 
D) P for purchases journal 
E) G for general journal.

Question 7

Postings to the accounts payable ledger should be made:

Accepted Answer

A) monthly. 
B) at the end of the fiscal period. 
C) weekly. 
D) daily.

Question 8

For each of the transactions listed below, identify the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal.
-Received an allowance for some merchandise that was slightly damaged but can be sold at a reduced price; received a credit memorandum.

Accepted Answer

A) CR for cash receipts journal 
B) CP for cash payments journal 
C) S for sales journal 
D) P for purchases journal 
E) G for general journal.

Question 9

For each of the transactions listed below, identify the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal.
-Purchased merchandise; the supplier's invoice, which includes a freight charge, has payment terms of 2/10, n/30.

Accepted Answer

A) CR for cash receipts journal 
B) CP for cash payments journal 
C) S for sales journal 
D) P for purchases journal 
E) G for general journal.

Question 10

Match the accounting terms with the description by entering the proper letter in the space provided. A. Cost of goods sold H. Purchases account B. Freight In account I. Purchases discount C. Purchase allowance J. Purchases journal D. Purchase invoice K. Receiving report E. Purchase order L. Sales discount F. Purchase requisition M. Sales invoice G. Purchase return N. Schedule of accounts payable ________ 1. A cash discount offered⁴⁶ ________ 1. A cash discount offered to the customer for payment within a specified period, on the books of the buyer 2. A bill received for goods purchased ________ 3. A special journal used to record the purchase of goods on credit ________ 4. A price reduction on a purchase from the amount originally billed ________ 5. A cash discount offered by the supplier for payment within a specified period, on the books of the seller ________ 6. Return to the supplier of unsatisfactory goods ________ 7. A supplier's billing document

Accepted Answer

The answer of Match the accounting terms with the description...

Question 11

A purchase of merchandise for cash should be recorded in the purchases journal.

Accepted Answer

A) True 
 B)False

Question 12

At the end of September 2019 and before the purchases journal was posted, selected general ledger account balances for Paper Products were as follows (each account had a normal balance):
 $\begin{array}{l|l}
\text { Accounts Payable } &{\$ 6,380} \
\hline \text { Purchases } & 2,530 \
\hline \text { Freight In } & 0
\end{array}$ 
The purchases journal had the following totals: Purchases, $18,650; Freight In, $1,620; Accounts Payable, $20,270.
Calculate the ending balance of each of the three accounts after the posting from the purchases journal. Indicate whether each balance is a debit or credit.

Accepted Answer

The answer of At the end of September 2019 and...

Question 13

The supplier's invoice is the source document for a purchase on credit transaction.

Accepted Answer

A) True 
 B)False

Question 14

To show that the totals of the amount columns in the purchases journal were posted, the appropriate account numbers are written in parentheses below the totals.

Accepted Answer

A) True 
 B)False

Question 15

Freight In and Purchases Returns and Allowances are deducted from Purchases to determine the net delivered cost of purchases.

Accepted Answer

A) True 
 B)False

Question 16

The total of the balances in the individual creditor's accounts should agree with the balance of:

Accepted Answer

A) the Sales account in the general ledger. 
B) the Accounts Receivable account in the general ledger. 
C) the Purchases account in the general ledger. 
D) the Accounts Payable account in the general ledger.

Question 17

A firm had purchases of $14,600, freight charges of $870, and purchases returns and allowances of
$1,350 during one month. Its net delivered cost of purchases was:

Accepted Answer

A) $12,380. 
B) $14,120. 
C) $15,080. 
D) $16,820.

Question 18

An allowance received from a creditor is posted to the ________ column of the creditor's account.

Accepted Answer

The answer of An allowance received from a creditor is...

Question 19

Music, Inc. uses a periodic inventory system when recording its purchases and sales of inventory. If the business returns $1,000 of damaged goods to its supplier, select the correct entry to record the return:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 20

The journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid by their supplier and added to the invoice is:

Accepted Answer

A) debit Accounts Payable $2,875, debit Freight in $125; credit Purchases $2,750 
B) debit Accounts Receivable $2,875; credit Sales $2,875 
C) debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875 
D) debit Purchases $2,750; credit Accounts Payable $2,750

Exam 8: Accounting for Purchases and Accounts Payable

Skiing International uses a perpetual inventory system when recording its purchases and sales of inventory. If the business purchases $8,000 of goods on account, select the correct entry to record the purchase:

Match the description with the accounting terms.

The amount of Freight In for a period is reported on:

Check marks next to the individual amounts in the purchases journal mean that the amounts:

For each of the transactions listed below, select the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal. -Purchased merchandise with terms of net 30 days.

Postings to the accounts payable ledger should be made:

A purchase of merchandise for cash should be recorded in the purchases journal.

The supplier's invoice is the source document for a purchase on credit transaction.

To show that the totals of the amount columns in the purchases journal were posted, the appropriate account numbers are written in parentheses below the totals.

Freight In and Purchases Returns and Allowances are deducted from Purchases to determine the net delivered cost of purchases.

The total of the balances in the individual creditor's accounts should agree with the balance of:

A firm had purchases of $14,600, freight charges of $870, and purchases returns and allowances of $1,350 during one month. Its net delivered cost of purchases was:

An allowance received from a creditor is posted to the ________ column of the creditor's account.

Music, Inc. uses a periodic inventory system when recording its purchases and sales of inventory. If the business returns $1,000 of damaged goods to its supplier, select the correct entry to record the return:

The journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid by their supplier and added to the invoice is: