Jenny purchases goods for $650 on account. She is later issued a credit memorandum to receive credit for the return of $150 of goods. The balance due is _____.

a.$500

b.$150

c.$650

d.$800

e.$0

A liability account used to record sales tax collected and owed:

a.Sales Tax Payable

b.Sales Tax Expense

c.Prepaid Taxes

d.Merchandise Tax

Type of account and normal balance of Sales Discount:

a.Revenue, CR

b.Contra-Revenue, DR

c.Liability, CR

d.Asset, DR

A form used by business to inform customers that their account balance has been reduced is:

a.Sales Return and Allowance Memo

b.Credit Memorandum

c.Debit Memorandum

d.Adjustment Memorandum

Entries in the purchases journal are posted to the

a.general ledger only.

b.accounts payable ledger and the purchases ledger.

c.general ledger and the accounts payable ledger.

d.accounts payable ledger only.

e.accounts payable ledger and the accounts receivable ledger.

Account type and normal balance of the Purchases Account:

a.Asset, DR

b.Expense, DR

c.Expense, CR

d.Asset, CR

A debit to Accounts Payable for a return of goods on account will be posted to the controlling account but not to the individual creditor's account.

True

False

From the viewpoint of the buyer, a business form prepared by the seller that lists the items shipped, their cost, and the shipping terms is a(n)

a.COD statement.

b.purchase requisition.

c.invoice.

d.sales requisition.

e.purchase order.

A schedule of Accounts Receivable is prepared from:

a.Accounts Receivable Control Account

b.Trial Balance

c.Accounts Receivable Subsidiary Ledger

d.Balance Sheet

One of the advantages of a sales journal is that it eliminates individual posting of entries to the Accounts Receivable account in the general ledger.

True

False

The Purchases account is used to record the buying of goods and supplies.

True

False

Transactions for purchases returns and allowances affecting Accounts Payable are recorded in the general journal.

True

False

The Accounts Payable account in the general ledger controls the accounts payable ledger.

True

False

A company's written offer to buy goods:

a.Purchase Source Document

b.Purchase Requisition

c.Offer for Goods

d.Purchase Order

Which of the following is an example of good internal controls over purchases?

a.The person who orders should be authorized for payment.

b.Purchases are made only after proper authorization is given.

c.Payment for purchases should be based on the purchase order only.

d.The person who writes the check should be involved in the foregoing purchasing procedures.

The total of goods sold on account is normally posted daily from the sales journal to the general ledger.

True

False

When recording sales of goods for cash, debit Accounts Receivable and credit Cash.

True

False

When goods are shipped FOB shipping point, which of the following is NOT true?

a.The seller may pay the freight charges directly, but invoices the buyer.

b.The seller assumes responsibility for all freight costs.

c.Shipping costs may be listed separately on the customer's invoice.

d.The buyer is responsible for all freight costs.

The individual amounts in the Accounts Payable Credit column of the purchases journal are posted

a.individually to the accounts payable ledger.

b.individually to the Purchases account in the general ledger.

c.individually to the Accounts Payable account in the general ledger.

d.in total to the accounts receivable ledger.

e.in total to the accounts payable ledger.

The purchases journal is used for the purchase of

a.merchandise for cash.

b.merchandise or other assets for cash.

c.merchandise on account.

d.assets other than merchandise on account.

e.assets other than merchandise for cash.