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Exam 8: Accounting for Purchases and Accounts Payable

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Question 1

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Match the accounting terms with the description by entering the proper letter in the space provided.

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(1) H, (2)...

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Question 2

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The Freight In account should have a(n) ____________________ balance.

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No amounts are posted from the purchases journal to the accounts payable subsidiary ledger during the month.

A balance that is circled in the accounts payable ledger is a credit balance.

The Purchases Returns and Allowances account is a(n) ____________________ cost of goods sold account.

Read the description of the following transactions that are recorded during the accounting period for Drummond Consulting Services. Determine the account to be debited and the account to be credited. A) Purchased merchandise with terms of net 30 days. B) Returned some damaged merchandise to a supplier and received a credit memorandum. C) Issued a check to a supplier as a payment on account. D) Received an allowance for some merchandise that was slightly damaged but can be sold at a reduced price. Received a credit memorandum. E) Purchased merchandise with terms of 2/10, n/30. The supplier's invoice includes a freight charge.

Credit terms of 1/10, n/30 mean that

On April 30, 2013, the general ledger of the Danielle's Dress Shop showed the following balances: Purchases $9,000; Freight In, $50; Purchases Returns and Allowances, $90. Determine the following: A) What was the delivered cost of purchases for April? B) What was the net delivered cost of purchases for April?

The Purchases account is

Read the description of the following transactions that are recorded during the accounting period for Hughley Consulting Services. Determine the account to be debited and the account to be credited. A) Issued a check to a supplier as a payment on account. B) Purchased merchandise; the supplier's invoice, which includes a freight charge, has payment terms of 2/10, n/30. C) Returned some damaged merchandise to a supplier and received a credit memorandum. D) Received an allowance for some merchandise that was slightly damaged but can be sold at a reduced price; received a credit memorandum. E) Purchased merchandise with terms of net 30 days.

The total of the balances in the individual creditor's accounts should agree with the balance of

A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise.

For each of the transactions listed below, identify the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal.

Which of the following statements is correct?

When the sales department needs goods, it sends the purchasing department a form called

The use of a purchases journal strengthens the audit trail.

Purchases returns and allowances are recorded in the ____________________ journal if a firm does not have a purchases returns and allowances journal.

In a firm that uses special journals, the issuance of a check to a supplier as a payment on account is recorded in the

An allowance received from a creditor is posted to the ____________________ column of the creditor's account.

When an accounts payable ledger is used, the Accounts Payable account in the general ledger becomes a(n) ____________________ account.