1) The bank statement at November 30 shows a service charge of $25, earned interest of $230, and a NSF check for $150. The balance per books at November 30 is $6,910. What is the adjusted bank/book balance at November 30?

a. $7105

b. $6805

c. $6750

d. $6965

2) Mountainside bed & breakfast uses the net method to record purchases of food and beverage. The last food order was for $1500 and the terms were 2/10, n/30. What would be the journal entry when the items are received?

a. Debit Food inventory $1500; credit cash $1500

b. Debit food inventory $1500; credit accounts payable $1470; credit purchase discount $30

c. Debit food inventory $1500; credit accounts payable $1500

d. Debit food inventory $1470; credit accounts payable $1470

3) Which statement is true concerning different methods of recording purchases?

a. a company can use both methods at the same time

b. gross method does not reveal discounts lost

c. net method reveals discounts taken

d. gross method is the preferred way to record purchases

4) The catfish house uses the net method to record purchases. They have an invoice for $8,000 that has terms of 3/10, n/30. They pay the invoice on the 20th day. What would be the journal entry to record this payment?

a. debit accounts payable $7760; credit cash $7760

b. debit food inventory $8000; credit cash $8000

c. debit accounts payable $8000; credit cash $8000

d. debit accounts payable $7760; debit discounts lost $240; credit cash $8000