Question 1

Bally Boutique uses a perpetual inventory system when recording its purchases and sales of inventory.The business sells $6,000 of goods to charge account customers and the goods originally cost Bally,$3000.The entry to record the sale would include:

Accepted Answer

In a perpetual inventory system, the cost of goods sold is recorded at the time of sale. Therefore, you debit Cost of Goods Sold and credit Merchandise Inventory for the cost of the goods sold.

Question 2

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.

Accepted Answer

The answer of For each of the transactions listed below,identify...

Question 3

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

Accepted Answer

In a perpetual inventory system, the Merchandise Inventory account replaces the Purchases, Purchase Returns and Allowances, and Freight In accounts, as inventory is continuously updated with each transaction.

Question 4

Which of the following accounts has a normal debit balance?

Accepted Answer

The answer of Which of the following accounts has a...

Question 5

At the end of September 2016 and before the purchases journal was posted,selected general ledger account balances for Paper Products were as follows (each account had a normal balance):  The purchases journal had the following totals: Purchases,$19,540;Freight In,$1,225;Accounts Payable,$20,765.
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.

Accepted Answer

The answer of At the end of September 2016 and...

Question 6

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:

Accepted Answer

The entry to record the purchase on account would be a debit to inventory and a credit to accounts payable. Option B shows the correct account titles and amounts for this entry.

Question 7

At the end of February 2016 and before the purchases journal was posted,selected general ledger account balances for Volter Repair Services were as follows (each account had a normal balance):  The purchases journal had the following totals: Purchases,$28,000;Freight In,$1,000;Accounts Payable,$29,000.
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.

Accepted Answer

The answer of At the end of February 2016 and...

Question 8

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.

Accepted Answer

The answer of For each of the transactions listed below,identify...

Question 9

For good internal control of purchases,businesses should do all of the following

Accepted Answer

The answer of For good internal control of purchases,businesses should...

Question 10

If the perpetual inventory system is used to record the purchase and sale of goods,the account used to record shipping charges is the

Accepted Answer

The answer of If the perpetual inventory system is used...

Question 11

The Fast Frame Shop had the following transactions for the month of January 201.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 January 31.

Accepted Answer

The answer of The Fast Frame Shop had the following...

Question 12

The Picture Perfect Camera Shop had the following transactions for the month of August 2016.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.

Accepted Answer

The answer of The Picture Perfect Camera Shop had the...

Question 13

Read the description of the following transactions that are recorded during the accounting period for Drummond Consulting Services.Determine the account to be debited and the account to be credited.
A)Purchased merchandise with terms of net 30 days.
B)Returned some damaged merchandise to a supplier and received a credit memorandum.
C)Issued a check to a supplier as a payment on account.
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 2/10,n/30.The supplier's invoice includes a freight charge.

Accepted Answer

The answer of Read the description of the following transactions...

Question 14

Explain each of the following credit terms.
A)n/30
B)n/10 EOM
C)2/10,n/30
D)1/10,n/20
E)3/5,n/30

Accepted Answer

The answer of Explain each of the following credit terms.
A)n/30
B)n/10...

Question 15

One of the supplier accounts from the accounts payable ledger for Paragon Video is shown below.Explain each of the entries that have been posted to this supplier's subsidiary ledger account.

Accepted Answer

The answer of One of the supplier accounts from the...

Question 16

The purchases journal for Carothers Company is shown below.Describe how the amounts would be posted to the general ledger accounts.

Accepted Answer

The answer of The purchases journal for Carothers Company is...

Question 17

The purchases journal for Wright Company is shown below.Describe how the amounts would be posted to the general ledger accounts.

Accepted Answer

The answer of The purchases journal for Wright Company is...

Question 18

Read the description of the following transactions that are recorded during the accounting period for Hughley Consulting Services.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

The answer of Read the description of the following transactions...

Question 19

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

Accepted Answer

When a business pays $1,100 on account to a creditor, it means that they are paying off a liability. The liability account that is most likely affected by this payment is accounts payable. Therefore, the effect of the payment is a decrease to cash (asset) and a decrease to accounts payable (liability).

Question 20

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?

Accepted Answer

Net delivered cost of purchases = cost of merchandise + freight charges - purchase returns$21,900 = $22,650 + $1,720 - purchase returnsPurchase returns = $22,650 + $1,720 - $21,900Purchase returns = $2,470

Quiz 8: Accounting for Purchases and Accounts Payable

Bally Boutique uses a perpetual inventory system when recording its purchases and sales of inventory.The business sells $6,000 of goods to charge account customers and the goods originally cost Bally,$3000.The entry to record the sale would include:

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.

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

Which of the following accounts has a normal debit balance?

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:

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.

For good internal control of purchases,businesses should do all of the following

If the perpetual inventory system is used to record the purchase and sale of goods,the account used to record shipping charges is the

The Fast Frame Shop had the following transactions for the month of January 201.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 January 31.

The Picture Perfect Camera Shop had the following transactions for the month of August 2016.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.

Explain each of the following credit terms. A)n/30 B)n/10 EOM C)2/10,n/30 D)1/10,n/20 E)3/5,n/30

One of the supplier accounts from the accounts payable ledger for Paragon Video is shown below.Explain each of the entries that have been posted to this supplier's subsidiary ledger account.

The purchases journal for Carothers Company is shown below.Describe how the amounts would be posted to the general ledger accounts.

The purchases journal for Wright Company is shown below.Describe how the amounts would be posted to the general ledger accounts.

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

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?