Question 1

When merchandise previously sold is returned for credit, the journal entry is

Accepted Answer

A) debit Sales; credit Accounts Receivable. 
B) debit Sales Returns and Allowances; credit Accounts Payable. 
C) debit Accounts Receivable; credit Sales Returns and Allowances. 
D) debit Sales Returns and Allowances; credit Accounts Receivable. 
E) debit Accounts Receivable; credit Purchases Discounts.

Question 2

The purpose of an accounts receivable ledger is

Accepted Answer

A) to provide information for customers who call. 
B) to provide detailed information to management concerning Accounts Receivable accounts. 
C) to provide information to be used in preparing a schedule of accounts receivable. 
D) all of these. 
E) none of these.

Question 3

Debiting the Sales Returns and Allowances account will have the same effect on sales as a deduction from the Sales account.

Accepted Answer

A) True 
 B)False

Question 4

Assume the general ledger Accounts Receivable controlling account matches the balance of the schedule of accounts receivable. Is it possible that errors could have occurred anyway? Explain how this could have occurred or explain why it is impossible for this to have occurred.

Accepted Answer

The answer of Assume the general ledger Accounts Receivable controlling...

Question 5

Jones Co. takes a physical inventory count of their merchandise each year in order to update the inventory value. This is an example of a(n):

Accepted Answer

A) Perpetual Inventory System 
B) Periodic Inventory System 
C) Re-evaluation Inventory System 
D) Adjusting Inventory System

Question 6

The return of goods for credit would be recorded in the purchases journal.

Accepted Answer

A) True 
 B)False

Question 7

Transactions for purchases returns and allowances affecting Accounts Payable are recorded in the general journal.

Accepted Answer

A) True 
 B)False

Question 8

J. Smith purchases merchandise from Hi-View Industries for $25,250 on account. Upon inspection of the merchandise received, J. Smith discovers damaged goods in the amount of $1,000 and requests to return the damaged merchandise to Hi-View Industries. What source document would Hi-View industries use for the journal entry to process this return?

Accepted Answer

A) Debit Memorandum 
B) Credit Memorandum 
C) Purchase Memorandum 
D) Return Memorandum

Question 9

The source for preparing the schedule of accounts payable is the

Accepted Answer

A) purchase invoices. 
B) purchases journal. 
C) Accounts Payable controlling account. 
D) accounts payable ledger. 
E) accounts receivable ledger.

Question 10

Assuming the use of special journals, the sale of merchandise to Jerri Wiles on account would be recorded in the

Accepted Answer

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

Question 11

Hi-View Industries, sells merchandise to Action Powersports on account. As terms of the deal, Hi-View Industries will coordinate the shipment, but Action Powersports is responsible for paying the shipping costs. This is an example of:

Accepted Answer

A) FOB Destination 
B) FOB Shipping Point 
C) Freight-In 
D) Freight-Out

Question 12

The spaces in the purchases journal used for the invoice date and terms are intended to make it easier to pay the bill on time.

Accepted Answer

A) True 
 B)False

Question 13

From the viewpoint of the buyer, a business form prepared by the seller that lists the items shipped, their cost, and the shipping terms is a(n)

Accepted Answer

A) purchase requisition. 
B) COD statement. 
C) purchase order. 
D) sales requisition. 
E) invoice.

Question 14

Both wholesalers and retailers are types of merchandising companies.

Accepted Answer

A) True 
 B)False

Question 15

The schedule of accounts receivable shows

Accepted Answer

A) a list of sales returns for the month. 
B) total sales for the month. 
C) a list of individual creditors. 
D) a list of individual sales. 
E) a list of the balances of credit customer accounts.

Question 16

The Accounts Payable account in the general ledger controls the accounts payable ledger.

Accepted Answer

A) True 
 B)False

Question 17

Match the terms below with the correct definitions.
 
-Subsidiary ledger that presents the individual accounts of credit customers

Accepted Answer

The answer of Match the terms below with the correct...

Question 18

When using a perpetual inventory system, a business will debit Merchandise Inventory and credit Cost of Goods Sold each time a sale is recorded.

Accepted Answer

A) True 
 B)False

Question 19

Match the terms below with the correct definitions.
 
-Journal in which returns and allowances (on account) are recorded

Accepted Answer

The answer of Match the terms below with the correct...

Question 20

Lasalle Co. sold merchandise on account in the amount of $550. The sales tax rate is 6.5%. What is the amount credited to the Sales Tax Payable account.

Accepted Answer

A) $550 
B) $35.75 
C) $585.75 
D) $514.35

Exam 9: Sales and Purchases

When merchandise previously sold is returned for credit, the journal entry is

The purpose of an accounts receivable ledger is

Debiting the Sales Returns and Allowances account will have the same effect on sales as a deduction from the Sales account.

Assume the general ledger Accounts Receivable controlling account matches the balance of the schedule of accounts receivable. Is it possible that errors could have occurred anyway? Explain how this could have occurred or explain why it is impossible for this to have occurred.

Jones Co. takes a physical inventory count of their merchandise each year in order to update the inventory value. This is an example of a(n) :

The return of goods for credit would be recorded in the purchases journal.

Transactions for purchases returns and allowances affecting Accounts Payable are recorded in the general journal.

The source for preparing the schedule of accounts payable is the

Assuming the use of special journals, the sale of merchandise to Jerri Wiles on account would be recorded in the

Hi-View Industries, sells merchandise to Action Powersports on account. As terms of the deal, Hi-View Industries will coordinate the shipment, but Action Powersports is responsible for paying the shipping costs. This is an example of:

The spaces in the purchases journal used for the invoice date and terms are intended to make it easier to pay the bill on time.

From the viewpoint of the buyer, a business form prepared by the seller that lists the items shipped, their cost, and the shipping terms is a(n)

Both wholesalers and retailers are types of merchandising companies.

The schedule of accounts receivable shows

The Accounts Payable account in the general ledger controls the accounts payable ledger.

Match the terms below with the correct definitions. -Subsidiary ledger that presents the individual accounts of credit customers

When using a perpetual inventory system, a business will debit Merchandise Inventory and credit Cost of Goods Sold each time a sale is recorded.

Match the terms below with the correct definitions. -Journal in which returns and allowances (on account) are recorded

Lasalle Co. sold merchandise on account in the amount of $550. The sales tax rate is 6.5%. What is the amount credited to the Sales Tax Payable account.