Liz's Volleyball Warehouse has the following account balances at the end of the year:

Sales	$141,050
Sales Returns and Allowances	840
Sales Discounts	700
Purchases	73,500
Purchases Returns and Allowances	560
Purchases Discounts	650
Freight-in	210
Merchandise Inventory, Jan. 1	18,200
Merchandise Inventory, Dec. 31	12,600

Determine the amount to be reported as gross profit.

a.$79,610

b.$61,410

c.$67,220

d.$61,830

2. You have been hired by Kathy's Craft Supplies as a bookkeeper. You are reviewing the general journal transactions from the previous period. You immediately recognize that Kathy uses an accounts payable ledger. What was the indication?

a.The account number in the Posting Reference column indicates that there is a controlling account.

b.A slash (/) and a check mark (✓) appear in the Posting Reference column to indicate the accounts payable ledger account has been posted.

c.The sales on account transactions are recorded twice so that the general ledger and the accounts payable ledger both get updated.

d.There is not enough information in the journal alone to determine that an accounts payable ledger is used.

3. Purchases is the account used to record the cost of merchandise purchased. A debit to this account

a.decreases expenses.

b.increases expenses.

c.increases assets.

4. Keith owns Keep It Running. He provides general vehicle maintenance services and repairs. He has several suppliers, some of which do not accept credit customers. During the month of October, the following transactions occurred: purchase on account from Henderson Salvage Yard, $250; purchase for cash from Babinec Auto Parts, $500; purchase on account from Riverside Replacement Parts, $325; purchase on account from Petroleum Plus, $890; cash payment to Babinec Auto Parts, $350; and purchase on account from Wholesale Auto Supply, $610.

What is the balance in the subsidiary ledger for Babinec Auto Parts, assuming the beginning balance was $420?

a.$150

b.$70

c.$220

d.$570

d.decreases assets.

What can a business do to track the amount owed to individual suppliers?

a.Maintain an accounts receivable ledger

b.Maintain accounts payable ledger

c.Review the controlling account

d.Review the general journal

Purchase Returns and Allowances

a.is not a contra-cost account.

b.is a contra-purchases account.

c.has a normal debit balance.

d.is the seller's side of Sales Returns and Allowances.

Gunner's Pet and Livestock Supplies is negotiating pricing with several retailers. One of the retailers could prove to be a large customer for the company. Which of the following is an alternative to providing a separate price list for each customer every time there is a price change?

a.Cash discount

b.Trade discount

c.Sales discount

d.Credit discount

If the total on the schedule of accounts payable and the Accounts Payable balance in the general ledger does not agree, the error

a.must be in the total of the schedule.

b.could be in the total of the schedule, the postings to the subsidiary ledger, or in the controlling account in the general ledger.

c.must be in the postings to the subsidiary ledger.

d.must be in the controlling account in the general ledger.

You have been asked to prepare a schedule of accounts payable. The accounts payable ledger shows the following account balances:

Applebaum Associates	$ 0
Carlson Company	(490)
Berkins Inc.	975
Donald & Sons	821
Newell Supplies	716
Horton Partners	925
Sanchez Electronics	1,060
Young Technology	664
Cole Industries	(45)

How many suppliers would be listed on the schedule of accounts payable?

a.7

b.8

c.6

d.9

Gunner's Pet and Livestock Supplies makes all purchases on account and has a purchasing department. The horse supplies division would like to add solar panels for fencing to its product offerings. Which of the following documents will be prepared by the purchasing department and sent to the supplier to order the solar panels?

a.Purchase requisition

b.Purchase order

c.Purchase invoice

d.Voucher

A schedule of accounts payable is used

a.to determine the due date for each supplier's account balance.

b.to verify that the sum of the accounts payable ledger balances equals the Accounts Payable balance.

c.only when the sum of the subsidiary ledger account balances does not equal the balance of the controlling account.

d.to determine how many purchases from suppliers are made for cash.