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Exam 8: Accounting for Purchases and Accounts Payable

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Question 41

True/False

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

A) True
B) False

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Question 42

True/False

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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.

A) True
B) False

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Question 43

True/False

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

Individual amounts in the purchases journal are posted to the general ledger during the month.

The journal entry to record the purchase on account of $900 of merchandise with freight of $65 prepaid and added to the invoice is:

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

On June 30, 2013, the general ledger of the Shoe Closet, a retail store, showed the following balances: Purchases $19,000; Freight In, $500; Purchases Returns and Allowances, $900. Determine the following: A) What was the delivered cost of purchases for June? B) What was the net delivered cost of purchases for June?

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.

The abbreviation P1 in the Posting Reference column of an account indicates that the data was posted from page 1 of the cash payments journal.

Good internal control requires a ____________________ of duties.

Purchases of merchandise on credit should be recorded in

In a small firm, the creditor accounts are placed in ____________________ order in the accounts payable ledger.

A creditor's account in the accounts payable ledger has a $1,600 beginning balance. After a transaction for $700 is posted from the purchases journal, the balance of the creditor's account is

During March a firm purchased $22,650 of merchandise and paid freight charges of $1,720. If the net delivered cost of purchases for the March is $21,900, what is the total purchase returns for March?

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.

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

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.

The Picture Perfect Camera Shop had the following transactions for the month of August 2013. Record the transactions on page 7 of a purchases journal and page 9 of a general journal. Total, prove, and rule the purchases journal as of August 31.

Freight charges on merchandise purchases should be debited to

If a business pays $1,100 on account to a creditor, the effect of the payment is a decrease to cash and a