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Exam 8: Accounting for Purchases and Accounts Payable

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Question 21

Multiple Choice

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Which of the following statements is not correct?

A) Cash purchases of merchandise are not recorded in the purchases journal.
B) A credit purchase of equipment for use in the business would be recorded in the purchases journal.
C) The Purchases account has a normal debit balance.
D) The invoice date and credit terms must be carefully recorded in the purchases journal because they determine when payment is due.

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

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Question 22

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When an accounts payable subsidiary ledger is used,the entry to Accounts Payable requires two posting references in the general journal.

A) True
B) False

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Question 23

Essay

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

Since they are liability accounts,creditor's accounts in the accounts payable ledger normally have ____________________ balances.

On April 30,2016,the general ledger of the Danielle's Dress Shop showed the following balances: Purchases $9,000;Freight In,$50;Purchases Returns and Allowances,$90. Determine the following: A)What was the delivered cost of purchases for April? B)What was the net delivered cost of purchases for April?

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:

Credit purchases of supplies that are to be used in the business are entered in

The type of account and normal balance of Purchase Returns and Allowances is a(n)

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

Postings to the accounts payable ledger should be made

Match the accounting terms with the description by entering the proper letter in the space provided.

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

The entry to record the return of merchandise purchased on credit includes a debit to Accounts Payable and a credit to Purchases Returns and Allowances.

Purchases of merchandise on credit should be recorded in the ____________________ journal.

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

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

Match the accounting terms with the description by entering the proper letter in the space provided.

When an accounts payable ledger is used,the Accounts Payable account in the general ledger becomes a(n)____________________ account.

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

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