The accounts payable ledger has postings from which of the following sets of journals?

a.Purchases, cash payments, and general

b.Sales and cash payments

c.Purchases, cash receipts, and general

d.Cash payments and sales

e.Purchases and sales

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

a.Credit Memorandum

b.Debit Memorandum

c.Adjustment Memorandum

d.Sales Return and Allowance Memo

The invoice that is first prepared by the seller is called a sales invoice; the buyer calls the same invoice a purchase order.

True

False

A subsidiary ledger that contains individual accounts of creditors.

a.Vendor Ledger

b.Creditor Ledger

c.Purchase Journal

d.Accounts Payable Ledger

Which of the following is recorded in the sales journal?

a.sale of merchandise for cash

b.sale of merchandise on account

c.return of merchandise purchased for cash

d.purchase of merchandise for cash

e.return of merchandise purchased on account

A single summarizing account in the general ledger, representing all the accounts in a particular subsidiary ledger, is referred to as a

a.response account.

b.summary account.

c.controlling account.

d.pass-through account.

e.special account.

The purchases journal is used for the purchase of

a.merchandise for cash.

b.assets other than merchandise for cash.

c.assets other than merchandise on account.

d.merchandise on account.

e.merchandise or other assets for cash.

Zoey Products bought goods from Lily Company. The next day, Zoey Products returned the goods because they had a defect. Zoey Products would record this:

a.as a debit memorandum.

b.as a purchase discount.

c.as an abnormal sale.

d.as a sales memorandum.

e.as a purchase return.

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

a.Sales Tax Payable

b.Merchandise Tax

c.Sales Tax Expense

d.Prepaid Taxes

Classic Accessories, Inc. sold merchandise on account to Hi-View Industries for $2,950. What is the journal entry Classic Accessories will use to record this transaction?

a.SalesDR

CashCR

b.Account Receivable, Hi-ViewDR

SalesCR

c.SalesDR

Accounts Receivable, Hi-ViewCR

d.CashDR

SalesCR

J. Smith purchases merchandise from Hi-View Industries for $25,250 on account. Upon inspection of the merchandise received, J. Smith discovers damaged goods in the amount of $1,000 and requests to return the damaged merchandise to Hi-View Industries. What source document would Hi-View industries use for the journal entry to process this return?

a.Return Memorandum

b.Credit Memorandum

c.Debit Memorandum

d.Purchase Memorandum

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 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 Accounts Payable account in the general ledger.

c.in total to the accounts receivable ledger.

d.in total to the accounts payable ledger.

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

Hi-View Industries, sells merchandise to Action Powersports on account. As terms of the deal, Hi-View Industries will coordinate the shipment, but Action Powersports is responsible for paying the shipping costs. This is an example of:

a.Freight-Out

b.FOB Destination

c.FOB Shipping Point

d.Freight-In

Jimmie Jones purchases merchandise from GPS Industries for $15,500 on account. The terms were FOB Destination with freight costs of $100. Upon inspection of the merchandise received, Jimmie Jones discovers damaged goods in the amount of $2,500 and requests to return the damaged merchandise to GPS Industries. Once the return is processed, what is the new balance owed by Jimmie Jones?

a.$13,000

b.$15,500

c.$15,600

d.$13,100

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

True

False

Under the accrual basis of accounting, sales on account are not recorded in the sales journal until payment is received.

True

False

Jones Co. takes a physical inventory count of their merchandise each year in order to update the inventory value. This is an example of a(n):

a.Periodic Inventory System

b.Adjusting Inventory System

c.Re-evaluation Inventory System

d.Perpetual Inventory System

The purpose of an accounts receivable ledger is

a.to provide information for customers who call.

b.to provide information to be used in preparing a schedule of accounts receivable.

c.to provide detailed information to management concerning Accounts Receivable accounts.

d.All of these choices are correct.

e.None of these choices are correct.

What is the correct entry to record sales tax collected?

a.Sales Tax Payable CR

b.Sales Tax Expense CR

c.Sales Tax Expense DR

d.Sales Tax Payable DR