Exam 10: Purchases and Cash Payments

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:

Tyler returned $500 of merchandise within the discount period.The entry to record the return is to:

A purchase discount correctly taken was debited to Purchases at the time the entry was recorded.This error will cause:

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

Which of the following accounts is a contra-cost account?

Jackson purchased $500 of goods and received credit terms of 2/10,n/30.How much did he pay if payment was made during the discount period?

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 purchase would include:

Purchases Returns and Allowances:

The account Freight-In accumulates the shipping costs to the seller.

Explain the difference between F.O.B.shipping point and F.O.B.destination.

A debit memorandum decreases which account on the seller's books?

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. June 16 Purchased merchandise having a price of $\$ 6,000$ from the Shelby Manufacturing Co. on account with credit terms $10 , \mathrm { n } / 30$ . Transportation terms F.O.B destination. June 16 Purchased merchandise having a price of $\$ 9,000$ from the Ajax Supply House on account with credit terms $2 / 10 , \mathrm { n } / 30$ . Transportation terms F.O.B shipping point. The freight costs were $\$ 175$ . June 17 Received the goods from Shelby. June 17 Received the goods from Ajax. June 20 Returned for credit merchandise with an invoice price of $\$ 800$ to Ajax. June 25 Paid Shelby the amount owed. June 28 Paid Ajax the amount owed. June 30 Returned for cash, merchandise with an invoice price of $\$ 400$ to Shelby. -Prepare the necessary general journal entry for June 20.

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. - Column 1 Column 2 Column 3 Purchases

A cost account is treated the same as:

Before paying an invoice,the accounting department must check:

The return of merchandise was recorded as a debit to Accounts Receivable and a credit to Purchases Returns and Allowances.This error will cause:

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. June 16 Purchased merchandise having a price of $\$ 6,000$ from the Shelby Manufacturing Co. on account with credit terms $10 , \mathrm { n } / 30$ . Transportation terms F.O.B destination. June 16 Purchased merchandise having a price of $\$ 9,000$ from the Ajax Supply House on account with credit terms $2 / 10 , \mathrm { n } / 30$ . Transportation terms F.O.B shipping point. The freight costs were $\$ 175$ . June 17 Received the goods from Shelby. June 17 Received the goods from Ajax. June 20 Returned for credit merchandise with an invoice price of $\$ 800$ to Ajax. June 25 Paid Shelby the amount owed. June 28 Paid Ajax the amount owed. June 30 Returned for cash, merchandise with an invoice price of $\$ 400$ to Shelby. -Prepare the necessary general journal entry for June 25.

Special journals are used to:

Which account is the controlling account for the amounts owed to individual creditors?

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used. Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc. Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$ . Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co. Nov. 10 Paid the amount due to Bartkowski Inc. Nov. 12 Paid the amount due to Thiesman and Co. Nov. 23 Paid the amount due to Montana Supply Co. -Journalize the Nov.10 transaction.