Question 1

The purchases journal of a business that uses periodic inventory system will include a column titled ________.
A)Cost of Goods Sold DR
B)Purchases DR
C)Accounts Payable DR
D)Merchandise Inventory DR

Accepted Answer

The purchases journal of a business that uses periodic inventory system will include a column titled "Purchases DR" to record all purchases of inventory during a specific accounting period. This purchase is not recorded in the inventory account until the end of the accounting period when a physical count is performed. The cost of goods sold account is not updated until the end of the accounting period, when the cost of goods is calculated by subtracting the ending inventory from the cost of goods available for sale. The accounts payable account is used to record the amount owed to suppliers and is not recorded in the purchases journal. The merchandise inventory account is updated at the end of the accounting period when a physical count is performed, and is not recorded in the purchases journal.

Question 2

Credit purchases are recorded in the purchases journal.

Accepted Answer

Credit purchases, meaning purchases made on credit, are recorded in the purchases journal.

Question 3

An automobile company purchases spark plugs,for cash.When using a manual accounting information system,the company will record this transaction in the ________.
A)purchases journal
B)general journal
C)cash payments journal
D)sales journal

Accepted Answer

The cash payments journal is used to record all transactions involving cash outflows, such as the purchase of spark plugs for cash.

Question 4

In a purchases journal,the total of the ________ column is not posted to the general ledger.
A)Merchandise Inventory DR
B)Other Accounts DR,Amount
C)Accounts Payable CR
D)Office Supplies DR

Accepted Answer

The answer of In a purchases journal,the total of the...

Question 5

The Other Accounts DR columns of a purchases journal are used for recording merchandise inventory and office supplies.

Accepted Answer

The Other Accounts DR columns of a purchases journal are used for recording expenses such as freight, delivery, and purchase returns and allowances, not merchandise inventory and office supplies.

Question 6

Cash purchases are generally recorded in the ________.
A)sales journal
B)cash receipts journal
C)cash payments journal
D)purchases journal

Accepted Answer

Cash purchases are recorded in the cash payments journal, which is used to record all cash payments made by the business, including expenses and purchases. The sales journal is used to record sales made on credit, the cash receipts journal is used to record all cash received by the business, and the purchases journal is used to record all purchases made on credit.

Question 7

All transactions are recorded in either one of the special journals or in the general journal,but not both.

Accepted Answer

Special journals are used for recording common transactions such as sales, purchases, cash receipts, and cash payments, while the general journal is used for infrequent or non-routine transactions. Each transaction is recorded in only one journal to maintain a clear and organized record-keeping system.

Question 8

Which of the following is true of posting entries from a purchases journal to the general ledger?
A)The posting references are not mentioned in the subsidiary ledger.
B)The Accounts Payable balance in the general ledger should be less than the sum of the individual vendor balances in the subsidiary ledger.
C)The amounts in the Other Accounts DR column are posted individually to the specific accounts.
D)It is done on a daily basis for all the accounts.

Accepted Answer

The amounts in the Other Accounts DR column are posted individually to the specific accounts. Option A is incorrect because posting references are mentioned in the subsidiary ledger. Option B is incorrect because the Accounts Payable balance in the general ledger should be equal to the sum of the individual vendor balances in the subsidiary ledger. Option D is incorrect because posting from the purchases journal to the general ledger may not necessarily be done on a daily basis, it depends on the accounting system in place.

Question 9

Which of the following transactions will be recorded in the purchases journal?
A)purchase of furniture on account
B)purchase of merchandise inventory for cash
C)sale of a product on account
D)sales of a product for cash

Accepted Answer

The purchases journal is used to record credit purchases of goods or services. Option A describes a purchase on account, which falls under the category of credit purchases and therefore should be recorded in the purchases journal. The other options do not involve credit purchases and should be recorded in a different journal, such as the cash receipts journal or sales journal.

Question 10

Posting from the cash payments journal is similar to posting from the cash receipts journal.

Accepted Answer

Both the cash payments journal and the cash receipts journal are used to record cash transactions. Therefore, posting from the cash payments journal is similar to posting from the cash receipts journal.

Question 11

The purchases journal is a special journal used to record ________.
A)cash receipts,interest rate payments,and purchases
B)credit sales of assets that occur infrequently such as buildings,property,and equipment
C)credit sales of inventory
D)merchandise inventory,office supplies,and other assets purchased on account

Accepted Answer

The purchases journal is a special journal used to record merchandise inventory, office supplies, and other assets purchased on account.

Question 12

Which of the following is a column in a purchases journal?
A)Cost of Goods Sold CR
B)Accounts Payable CR
C)Sales Revenue DR
D)Interest Revenue CR

Accepted Answer

The purchases journal records all purchases made on credit, and the Accounts Payable account is credited for each purchase. The other options listed are not typically found in a purchases journal.

Question 13

Which of the following is not included in the purchases journal?
A)purchases of Merchandise Inventory for cash
B)purchase of Merchandise Inventory on account
C)purchase of Office Supplies on credit
D)purchase of Capital Assets on account

Accepted Answer

The answer of Which of the following is not included...

Question 14

When recording in a purchases journal with a periodic inventory system,the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR.

Accepted Answer

The Merchandise Inventory DR column would not be replaced with a Cost of Goods Sold DR column in a purchases journal with a periodic inventory system. Instead, the cost of goods sold would be calculated periodically, usually at the end of an accounting period, and recorded in a separate journal entry.

Question 15

Entries from the purchases journal are posted monthly to the accounts payable subsidiary ledger and daily to the general ledger.

Accepted Answer

Entries from the purchases journal are posted daily to the accounts payable subsidiary ledger and monthly to the general ledger.

Question 16

On April 1,a hardware manufacturing firm purchases inventory on account for $700.Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.
A)Merchandise Inventory decreases by $700 and Accounts Receivable decreases by $700.
B)Merchandise Inventory decreases by $700 and Accounts Receivable increases by $700.
C)Merchandise Inventory increases by $700 and Accounts Payable decreases by $700.
D)Merchandise Inventory increases by $700 and Accounts Payable increases by $700.

Accepted Answer

When inventory is purchased on account, it increases the Merchandise Inventory account and also increases the Accounts Payable account as the firm now owes money to the supplier. Therefore, the correct option is D where Merchandise Inventory increases by $700 and Accounts Payable also increases by $700. Option A and B are incorrect because they decrease Accounts Receivable, which is not affected by the purchase of inventory on account. Option C is also incorrect because it decreases Accounts Payable, which is not the correct effect of purchasing inventory on account.

Question 17

On July 4,a hardware manufacturing firm purchased inventory on account for $1,300.The company plans to pay $700 in the following week and the remaining amount in the week after.Which of the following is the correct entry to record this transaction in a purchases journal? Assume a perpetual inventory system is used.
A)$650 will be recorded in the Accounts Payable CR and Merchandise Inventory CR column.
B)$2,000 will be recorded in the Accounts Payable DR and Merchandise Inventory DR column.
C)$1,300 will be recorded in the Merchandise Inventory CR and Accounts Payable DR column.
D)$1,300 will be recorded in the Accounts Payable CR and Merchandise Inventory DR column.

Accepted Answer

Since the company purchased inventory on account, the Accounts Payable account needs to be credited for the full amount of $1,300. Additionally, since the company now has inventory on hand, the Merchandise Inventory account needs to be debited for the same amount.

For the payment portion of the transaction, $700 will be debited from the Accounts Payable account and credited to the Cash account in the next week. And in the following week, when the remaining $600 is paid, another $600 will be debited from the Accounts Payable account and credited to the Cash account.

Therefore, the correct entry to record this transaction in a purchases journal is:

Accounts Payable        CR   $1,300
Merchandise Inventory  DR   $1,300

Question 18

An automobile company purchases spark plugs,on account,for the production of its vehicles.When using a manual accounting information system,the company will record this transaction in the ________.
A)purchases journal
B)general journal
C)cash payments journal
D)sales journal

Accepted Answer

The purchases journal is used to record all credit purchases of a company. As the spark plugs are purchased on account (credit), the transaction will be recorded in the purchases journal. The other options, such as general journal, cash payments journal, and sales journal, do not specifically deal with credit purchases, and hence are not appropriate for recording this transaction.

Question 19

Which of the following is true of a purchases journal?
A)In a purchase journal,the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR for a periodic inventory system.
B)Cash purchases are recorded in the purchases journal.
C)A purchases journal is not used for a perpetual inventory system.
D)In a purchases journal,the Other Accounts DR columns are used for purchases on account of items other than merchandise inventory and office supplies.

Accepted Answer

Option A is incorrect because the Merchandise Inventory DR column is always used in a purchase journal, regardless of the inventory system being used. Option B is incorrect because cash purchases are recorded in a cash disbursements journal. Option C is incorrect because a purchases journal can be used for both periodic and perpetual inventory systems. Option D is correct because the Other Accounts DR columns are used to record purchases on account for items other than merchandise inventory and office supplies, such as equipment or furniture.

Question 20

The cash payments journal is a special journal used to record cash payments by only currency and not by check.

Accepted Answer

The answer of The cash payments journal is a special...

Quiz 27: Accounting Information Systems

The purchases journal of a business that uses periodic inventory system will include a column titled ________.

Credit purchases are recorded in the purchases journal.

An automobile company purchases spark plugs,for cash.When using a manual accounting information system,the company will record this transaction in the ________.

In a purchases journal,the total of the ________ column is not posted to the general ledger.

The Other Accounts DR columns of a purchases journal are used for recording merchandise inventory and office supplies.

Cash purchases are generally recorded in the ________.

All transactions are recorded in either one of the special journals or in the general journal,but not both.

Which of the following is true of posting entries from a purchases journal to the general ledger?

Which of the following transactions will be recorded in the purchases journal?

Posting from the cash payments journal is similar to posting from the cash receipts journal.

The purchases journal is a special journal used to record ________.

Which of the following is a column in a purchases journal?

Which of the following is not included in the purchases journal?

When recording in a purchases journal with a periodic inventory system,the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR.

Entries from the purchases journal are posted monthly to the accounts payable subsidiary ledger and daily to the general ledger.

On April 1,a hardware manufacturing firm purchases inventory on account for $700.Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

An automobile company purchases spark plugs,on account,for the production of its vehicles.When using a manual accounting information system,the company will record this transaction in the ________.

Which of the following is true of a purchases journal?

The cash payments journal is a special journal used to record cash payments by only currency and not by check.