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Exam 8: Accounting for Purchases and Accounts Payable

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Question 41

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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?

A) $0
B) $2,470
C) $970
D) $3,440

E) A) and B)
F) B) and D)

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Question 42

Multiple Choice

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

A) Computations on the invoice should be checked for accuracy.
B) Another person should write the check for payment of the invoice.
C) Goods should be carefully checked when received.
D) Ensure that the same person is involved in the process of buying,receiving and paying for the goods.

E) A) and D)
F) B) and D)

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Question 43

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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.

Good internal control requires a _____________________ of duties.

The Purchases account is

Which of the following statements is correct?

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

Topix Music Store uses the perpetual inventory system and had the following transactions during the month of June.Record the transactions in the general journal.(Omit explanations) June 4 Purchased $10,000 of goods on account from Music Supply Store,terms 2/10,n/30. June 8 Received a freight bill directly from the transportation company for $50 indicating payment due in 30 days. June 15 Sold goods originally costing $400,to M.Brown for $1,000 on credit. June 25 Received a $150 credit memorandum from Music Supply Store as an allowance due to damaged goods.

A list of creditors and the balances owed to them is called a schedule of ___________________.

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

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.

On June 30,2016,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?

The source document for recording a purchase of merchandise on credit is

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.

Whenever a sales department needs goods,it sends the purchasing department a form called a(n)___________________.

In a firm that uses special journals,the purchase of merchandise with terms of 2/10,n/30 is recorded in the

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

Credit terms of 1/10,n/30 mean that

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.