Question 1

In a firm that uses special journals, the return of damaged merchandise to a supplier and receipt of a credit memorandum is recorded in the:

Accepted Answer

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

Question 2

A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise.

Accepted Answer

A) True 
 B)False

Question 3

Read the description of the following transactions that are recorded during the accounting period for Hughley Consulting Services. The company uses a periodic inventory system. Determine the account to be debited and the account to be credited.
A)Issued a check to a supplier as a payment on account.
B)Purchased merchandise; the supplier's invoice, which includes a freight charge, has payment terms of 2/10, n/30.
C)Returned some damaged merchandise to a supplier and received a credit memorandum.
D)Received an allowance for some merchandise that was slightly damaged but can be sold at a reduced price; received a credit memorandum.
E) Purchased merchandise with terms of net 30 days.

Accepted Answer

A) DEBIT ACCOUNTS PAYABLE; CREDIT CASH
B

Question 4

At the end of the accounting period the total of the accounts in the accounts payable subsidiary ledgers need not agree to the total in the firm's accounts payable ledger account.

Accepted Answer

A) True 
 B)False

Question 5

To record a return of merchandise purchased for cash on the books of the buyer, the accountant would:

Accepted Answer

A) debit Purchases Returns and Allowances and credit Cash. 
B) debit Purchases and credit Purchases Returns and Allowances. 
C) debit Purchases Returns and Allowances and credit Purchases. 
D) debit Cash and credit Purchases Returns and Allowances. 
A) debit Purchases Returns and Allowances and credit Cash. 
B) debit Purchases and credit Purchases Returns and Allowances. 
C) debit Purchases Returns and Allowances and credit Purchases. 
D) debit Cash and credit Purchases Returns and Allowances.

Question 6

The use of a purchases journal strengthens the audit trail.

Accepted Answer

A) True 
 B)False

Question 7

If an amount recorded in the general journal requires two postings, a diagonal line is used to separate the two posting references in the posting reference column.

Accepted Answer

A) True 
 B)False

Question 8

Purchases returns and allowances are recorded in the ________ journal if a firm does not have a purchases returns and allowances journal.

Accepted Answer

The answer of Purchases returns and allowances are recorded in...

Question 9

The Freight In account should have a(n)________ balance.

Accepted Answer

The answer of The Freight In account should have a(n)________...

Question 10

A cash discount offered by the supplier for payment within a specified period, on the books of the seller

Accepted Answer

A) Cost of goods sold 
B) Freight In account 
C) Purchase allowance 
D) Purchase invoice 
E) Purchase order
F)Purchase requisition
G)Purchase return
H)Purchases account
I)Purchases discount
J)Purchases journal
K)Receiving report
L)Sales discount
M)Sales invoice
N)Schedule of accounts payable 
A) Cost of goods sold 
B) Freight In account 
C) Purchase allowance 
D) Purchase invoice 
E) Purchase order
F)Purchase requisition
G)Purchase return
H)Purchases account
I)Purchases discount
J)Purchases journal
K)Receiving report
L)Sales discount
M)Sales invoice
N)Schedule of accounts payable

Question 11

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 2/10, n/30. The supplier's invoice includes a freight charge.

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. 
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 12

Nice Guys Apparel received a $200 credit memorandum as an allowance for goods that it returned to one of its suppliers. Identify the statement below that would be correct when posting the transaction.

Accepted Answer

A) A credit of $200 would be posted to the Purchases account in the general ledger. 
B) A debit of $200 would be posted to the supplier's account in the accounts payable ledger. 
C) A debit of $200 would be posted to the supplier's account in the accounts receivable ledger. 
D) A credit of $200 would be posted to the Accounts Receivable account in the general ledger. 
A) A credit of $200 would be posted to the Purchases account in the general ledger. 
B) A debit of $200 would be posted to the supplier's account in the accounts payable ledger. 
C) A debit of $200 would be posted to the supplier's account in the accounts receivable ledger. 
D) A credit of $200 would be posted to the Accounts Receivable account in the general ledger.

Question 13

The form sent to the supplier to order goods is called a(n)________.

Accepted Answer

The answer of The form sent to the supplier to...

Question 14

To record a return of merchandise purchased on credit on the books of the buyer, the accountant would:

Accepted Answer

A) debit Purchases and credit Purchases Returns and Allowances. 
B) debit Purchases Returns and Allowances and credit Accounts Receivable. 
C) debit Purchases Returns and Allowances and credit Purchases. 
D) debit Accounts Payable and credit Purchases Returns and Allowances. 
A) debit Purchases and credit Purchases Returns and Allowances. 
B) debit Purchases Returns and Allowances and credit Accounts Receivable. 
C) debit Purchases Returns and Allowances and credit Purchases. 
D) debit Accounts Payable and credit Purchases Returns and Allowances.

Question 15

Best Value Furniture uses the periodic inventory system to account for its inventory. It purchased
$2,000 of goods from its supplier but later returned $400 of the goods due to damage. Best Value would record the return by:

Accepted Answer

A) debiting Accounts Payable, crediting Purchases Purchase Returns and Allowances 
B) debiting Sales Returns and Allowances, crediting Accounts Receivable 
C) debiting Purchases Returns and Allowances, crediting Accounts Payable 
D) debiting Accounts Payable, crediting Purchases 
A) debiting Accounts Payable, crediting Purchases Purchase Returns and Allowances 
B) debiting Sales Returns and Allowances, crediting Accounts Receivable 
C) debiting Purchases Returns and Allowances, crediting Accounts Payable 
D) debiting Accounts Payable, crediting Purchases

Question 16

Credit terms of 1/10, n/30 means that:

Accepted Answer

A) payment in full is due 10 days after date of the invoice. 
B) a 1% discount may be taken for up to 30 days. 
C) if the invoice is paid within 10 days of its date, a 1% discount may be taken; otherwise the total amount is due in 20 days. 
D) if the invoice is paid within 10 days of its date, a 1% discount may be taken; otherwise the total amount is due in 30 days. 
A) payment in full is due 10 days after date of the invoice. 
B) a 1% discount may be taken for up to 30 days. 
C) if the invoice is paid within 10 days of its date, a 1% discount may be taken; otherwise the total amount is due in 20 days. 
D) if the invoice is paid within 10 days of its date, a 1% discount may be taken; otherwise the total amount is due in 30 days.

Question 17

The entry to record a purchase of merchandise on credit includes:

Accepted Answer

A) a debit to Purchases and a credit to Accounts Payable. 
B) a debit to Purchases and a credit to Accounts Receivable. 
C) a debit to Accounts Payable and a credit to Purchases. 
D) a credit to Purchases and a credit to Accounts Payable. 
A) a debit to Purchases and a credit to Accounts Payable. 
B) a debit to Purchases and a credit to Accounts Receivable. 
C) a debit to Accounts Payable and a credit to Purchases. 
D) a credit to Purchases and a credit to Accounts Payable.

Question 18

If a perpetual inventory system is used instead of a periodic system, identify the accounts that the
Merchandise Inventory account replaces.

Accepted Answer

A) Purchases, Sales, Freight In 
B) Purchases, Cost of Goods Sold 
C) Purchases, Accounts Receivable, Freight In 
D) Purchases, Purchase Returns and Allowances, Freight In 
A) Purchases, Sales, Freight In 
B) Purchases, Cost of Goods Sold 
C) Purchases, Accounts Receivable, Freight In 
D) Purchases, Purchase Returns and Allowances, Freight In

Question 19

The Purchases account is:

Accepted Answer

A) a temporary account. 
B) a liability account. 
C) a permanent account. 
D) a subsidiary account. 
A) a temporary account. 
B) a liability account. 
C) a permanent account. 
D) a subsidiary account.

Question 20

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.
-Returned some damaged merchandise to a supplier and 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. 
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.

Exam 8: Accounting for Purchases and Accounts Payable

In a firm that uses special journals, the return of damaged merchandise to a supplier and receipt of a credit memorandum is recorded in the:

A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise.

At the end of the accounting period the total of the accounts in the accounts payable subsidiary ledgers need not agree to the total in the firm's accounts payable ledger account.

To record a return of merchandise purchased for cash on the books of the buyer, the accountant would:

The use of a purchases journal strengthens the audit trail.

If an amount recorded in the general journal requires two postings, a diagonal line is used to separate the two posting references in the posting reference column.

Purchases returns and allowances are recorded in the ________ journal if a firm does not have a purchases returns and allowances journal.

The Freight In account should have a(n)________ balance.

A cash discount offered by the supplier for payment within a specified period, on the books of the seller

Nice Guys Apparel received a $200 credit memorandum as an allowance for goods that it returned to one of its suppliers. Identify the statement below that would be correct when posting the transaction.

The form sent to the supplier to order goods is called a(n)________.

To record a return of merchandise purchased on credit on the books of the buyer, the accountant would:

Best Value Furniture uses the periodic inventory system to account for its inventory. It purchased $2,000 of goods from its supplier but later returned $400 of the goods due to damage. Best Value would record the return by:

Credit terms of 1/10, n/30 means that:

The entry to record a purchase of merchandise on credit includes:

If a perpetual inventory system is used instead of a periodic system, identify the accounts that the Merchandise Inventory account replaces.

The Purchases account is:

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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