Question 1

The use of a purchases journal strengthens the audit trail.

Accepted Answer

A) True 
 B)False

Question 2

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.E) A) and B)
F) B) and C)

Question 3

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 PurchasesE) B) and C)
F) A) and C)

Question 4

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

Accepted Answer

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

Question 5

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 6

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 InE) C) and D)
F) None of the above

Question 7

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.E) A) and B)
F) A) and C)

Question 8

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.F) D) and E)
G) A) and C)

Question 9

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.E) C) and D)
F) A) and B)

Question 10

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.F) A) and E)
G) D) and E)

Question 11

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 12

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 orderF) Purchase requisitionG) Purchase returnH) Purchases accountI) Purchases discountJ) Purchases journalK) Receiving reportL) Sales discountM) Sales invoiceN) Schedule of accounts payableO) D) and H)
P) E) and G)

Question 13

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 14

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 15

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.E) A) and D)
F) C) and D)

Question 16

The Purchases account is:

Accepted Answer

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

Question 17

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 18

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.E) A) and D)
F) A) and C)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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.E) B) and D)
F) B) and C)

Exam 8: Accounting for Purchases and Accounts Payable

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

Correct Answer
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Correct Answer
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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:

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

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

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:

Correct Answer
verified

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.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
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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.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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A) DEBIT ACCOUNTS PAYABLE; CREDIT CASH
B...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

The use of a purchases journal strengthens the audit trail.

Correct Answer
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The Purchases account is:

Correct Answer
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Exam 8: Accounting for Purchases and Accounts Payable

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA) DEBIT ACCOUNTS PAYABLE; CREDIT CASHB...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The use of a purchases journal strengthens the audit trail.

Correct AnswerverifiedShow Answer

The Purchases account is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
A) DEBIT ACCOUNTS PAYABLE; CREDIT CASH
B...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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