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Exam 8: Accounting for Purchases and Accounts Payable

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Question 31

Multiple Choice

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

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

E) None of the above
F) B) and C)

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Question 32

Multiple Choice

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Postings to the accounts payable ledger should be made:

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

E) None of the above
F) A) and B)

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Question 33

Multiple Choice

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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:

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

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.

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:

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

Match the description with the accounting terms.

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.

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

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

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 offered ⁴⁶ ________ 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

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

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:

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?

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:

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.

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.

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.