10 Intro to Accounting multiple choice questions. 16. The collection on account within the 1/10 n/30 discount period was recorded using a 10% discount rather than a 1% discount in both the controlling and subsidiary accounts. This error will cause the: a. net income for the period to be understated b. net income for the period to be overstated c. control account to not agree with the subsidiary ledger d. assets to be overstated 17. A checkmark in the PR column in the general journal means the: a. entry was recorded correctly b. amount was posted to the controlling account c. mount was recorded in the subsidiary ledger d. entry was audited 18. Net purchases are: a. Purchases + Purchases Returns and Allowances b. Purchases - Purchases Discount - Purchases Returns and Allowances c. Purchases - Freight - Purchases Returns and Allowances d. Purchases + Freight-in 19. If a display rack was purchased for the store, which of the following accounts would be increased? a. Store Equipment b. Purchases c. Cash d. Capital 20. A purchase discount was recorded as a credit to the Purchases account and a debit to Accounts Payable. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be overstated 21. Office Supplies (not used for resale) bought on account were returned for credit and recorded with a debit to Accounts Payable and a credit to Purchase Returns and Allowances. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be understated 22. Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This will be recorded with a debit to a(n): a. liability and a credit to an asset b. asset and a credit to an asset c. expense and a credit to a liability d. expense and a credit to an asset 23. If the company uses special journals, all payments should be recorded on a: a. cash receipts journal b. cash payments journal c. purchases journal d. sales journal 24. A characteristic of purchases is: a. it has a debit normal balance b. it reduces net income c. that it is used to record the purchase of merchandise to be resold d. All of the above. 25. Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use? a. purchased merchandise on account b. purchased merchandise for cash c. purchased office supplies for cash d. purchased office supplies on account

16. The collection on account within the 1/10 n/30 discount period was recorded using a 10% discount rather than a 1% discount in both the controlling and subsidiary accounts. This error will cause the: a. net income for the period to be understated b. net income for the period to be overstated c. control account to not agree with the subsidiary ledger d. assets to be overstated 17. A checkmark in the PR column in the general journal means the: a. entry was recorded correctly b. amount was posted to the controlling account c. mount was recorded in the subsidiary ledger d. entry was audited 18. Net purchases are: a. Purchases + Purchases Returns and Allowances b. Purchases - Purchases Discount - Purchases Returns and Allowances c. Purchases - Freight - Purchases Returns and Allowances d. Purchases + Freight-in 19. If a display rack was purchased for the store, which of the following accounts would be increased? a. Store Equipment b. Purchases c. Cash d. Capital 20. A purchase discount was recorded as a credit to the Purchases account and a debit to Accounts Payable. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be overstated 21. Office Supplies (not used for resale) bought on account were returned for credit and recorded with a debit to Accounts Payable and a credit to Purchase Returns and Allowances. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be understated 22. Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This will be recorded with a debit to a(n): a. liability and a credit to an asset b. asset and a credit to an asset c. expense and a credit to a liability d. expense and a credit to an asset 23. If the company uses special journals, all payments should be recorded on a: a. cash receipts journal b. cash payments journal c. purchases journal d. sales journal 24. A characteristic of purchases is: a. it has a debit normal balance b. it reduces net income c. that it is used to record the purchase of merchandise to be resold d. All of the above. 25. Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use? a. purchased merchandise on account b. purchased merchandise for cash c. purchased office supplies for cash d. purchased office supplies on account 16. The collection on account within the 1/10 n/30 discount period was recorded using a 10% discount rather than a 1% discount in both the controlling and subsidiary accounts. This error will cause the: a. net income for the period to be understated b. net income for the period to be overstated c. control account to not agree with the subsidiary ledger d. assets to be overstated 17. A checkmark in the PR column in the general journal means the: a. entry was recorded correctly b. amount was posted to the controlling account c. amount was recorded in the subsidiary ledger d. entry was audited 18. Net purchases are: a. Purchases + Purchases Returns and Allowances b. Purchases - Purchases Discount - Purchases Returns and Allowances c. Purchases - Freight - Purchases Returns and Allowances d. Purchases + Freight-in 19. If a display rack was purchased for the store, which of the following accounts would be increased? a. Store Equipment b. Purchases c. Cash d. Capital 20. A purchase discount was recorded as a credit to the Purchases account and a debit to Accounts Payable. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be overstated 21. Office Supplies (not used for resale) bought on account were returned for credit and recorded with a debit to Accounts Payable and a credit to Purchase Returns and Allowances. This error will cause: a. net income to be overstated b. net income to be understated c. net income to not be affected d. total assets to be understated 22. Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This will be recorded with a debit to a(n): a. liability and a credit to an asset b. asset and a credit to an asset c. expense and a credit to a liability d. expense and a credit to an asset 23. If the company uses special journals, all payments should be recorded on a: a. cash receipts journal b. cash payments journal c. purchases journal d. sales journal 24. A characteristic of purchases is: a. it has a debit normal balance b. it reduces net income c. that it is used to record the purchase of merchandise to be resold d. All of the above. 25. Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use? a. purchased merchandise on account b. purchased merchandise for cash c. purchased office supplies for cash d. purchased office supplies on account