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Exam 10: Purchases and Cash Payments

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Question 1

Multiple Choice

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Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use?

A) Purchased merchandise on account
B) Purchased merchandise for cash
C) Purchased office supplies for cash
D) Returned merchandise inventory for credit

Correct Answer

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C

Question 2

Multiple Choice

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When merchandise is bought for resale,which of the following accounts would be decreased?

A) Store Equipment
B) Purchases
C) Cash
D) Capital

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Question 3

Multiple Choice

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Returned merchandise for credit under the perpetual inventory method.This will be recorded with:

Purchases discounts:

Merchandise Inventory is what type of account?

On June 15,Pinky Park purchased merchandise for the race track.The invoice was for $5,000,terms 2/10,n/30.On June 20,Paradise Park returned $200 of merchandise for credit.On June 25,it paid the amount owed.Fill in the blanks below. a)The debit to Purchases on June 15 is ________. b)The credit to Accounts Payable on June 15 is ________. c)The credit to Purchases Returns and Allowances on June 20 is ________. d)The credit to Cash on June 25 is ________. e)The credit to Purchases Discount on June 25 is ________.

A debit memorandum decreases which account on the buyer'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. -Special journals are used to:

A characteristic of Purchases is:

The entry to record returned merchandise to Vine Company is:

The Purchases Returns and Allowances account normally has a debit balance.

Jenny's Accessories bought 50 necklaces for $10 each on account.The invoice included a 2% 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:

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. -If the company uses special journals,all payments should be recorded on a:

Jack's Online Service on April 30 has the following account balances: $\begin{array} {| l | r| } \hline\text { Sales } & \$ 25,000 \\\hline \text { Sales Returns and Allowances } & 5,000 \\\hline \text { Purchases } & 20,000 \\\hline \text { Freight-In } & 1,000 \\\hline \text { Purchases Returns and Allow. } & 2,000 \\\hline \text { Purchases Discounts } & ? ? ? \\\hline\end{array}$ If net purchases for the period are $15,000,what is the amount in the Purchases Discounts account?

A cost account is treated the same as:

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 Bartkouski 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. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

When the term F.O.B.shipping point is used,title passes:

The Accounts Receivable and Accounts Payable are both controlling accounts.

Jemco bought goods for $300 on credit.Jemco returned $50 worth of goods.Terms of the sale were 2/10,n/30.If Jemco pays the amount owed within the discount period,what is the amount they should pay?

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?