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ACC 291T Week 2 Apply: Connect® Exercise

ACC 291T Week 2 Apply: Connect® Exercise

Review the Knowledge Check in preparation for this assignment.

Complete the Week 2 Exercise in Connect®.

Note: You have only one attempt available to complete this assignment.

Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date

Credit terms of 2/10, n/45 mean:

Multiple Choice

payment in full is due 2 days after date of the invoice.



if the invoice is paid within 10 days of its date, a 2% discount may be taken; otherwise the total amount is due in 35 days.



if the invoice is paid within 10 days of its date, a 2% discount may be taken; otherwise the total amount is due in 45 days.



payment in full is due 45 days after date of the invoice with no discount offered.

Assuming a periodic inventory system is used, the entry to record a return of merchandise purchased on credit would:

Multiple Choice



debit Purchases Returns and Allowances and credit Accounts Receivable.



debit Purchases Returns and Allowances and credit Purchases.



debit Purchases and credit Purchases Returns and Allowances.



debit Accounts Payable and credit Purchases Returns and Allowances.

Assuming a periodic inventory system is used, freight charges on merchandise purchases should be debited to:

Multiple Choice



the creditor’s account in the subsidiary ledger.



the Freight In account.



the Purchases account.



the Accounts Payable account.

Which of the following statements is ?

Multiple Choice



Purchases Discounts is a contra expense account with a normal credit balance.



Purchases Discounts is a revenue account with a normal credit balance.



Purchases Discounts is an asset account with a normal credit balance.



Purchases Discounts is an expense account with a normal debit balance.

Which of the following statements is ?

Multiple Choice



The person who ordered the goods should also authorize payment.



Purchase requisitions do not need to be printed on pre-numbered forms.



Calculations on an invoice are assumed to be if computer generated.



Purchases should be made only after receiving proper written authorization.

On Oct 1, Jerry’s Lighting purchased merchandise with a list price of $5,000 with credit terms of 1/10, n/30. On Oct 3, Jerry’s returns $500 of the merchandise. Assuming a periodic inventory system is used and Jerry’s pays the remaining amount owed on the purchase within the discount period, Jerry’s journal entry to record the payment, would include:

Multiple Choice



a debit to Accounts Receivable for $4,500.



a debit to Purchase Discounts for $45.



a debit to Accounts Payable for $4,500.



a debit to Merchandise Inventory for $45.

When a payment is due is determined by the invoice date and the:

Multiple Choice



transportation schedule.



accounting cycle.



credit terms.



delivery date.

Which of the following statements is ?

Multiple Choice



The credit terms, 2/10, n/30, allow the customer to take a 2 percent discount if payment is made within 10 days of the invoice, otherwise payment is due in full in 30 days.



The Purchases account is reported as an asset on the balance sheet.



The purchase requisition is the form sent to a supplier to order goods.



To the customer, a supplier’s invoice is a sales invoice.

The Purchases account is:

Multiple Choice



a subsidiary account.



a liability account.



a temporary account.



a permanent account.

Postings to the accounts payable ledger should be made:

Multiple Choice



daily.



monthly.



at the end of the fiscal period.



weekly.

Tune Tones Instrument Tuning Company owes Mandy Lynn’s Music Studio $6,854 as of November 1. During November, Tune Tones purchased merchandise from Mandy Lynn totaling $9,548 and made payments on account to Mandy Lynn in the amount of $7,250. The amount Tune Tones owes Mandy Lynn on November 30 is:

Multiple Choice



$4,556.



$9,152.



$9,548.



$6,854.

The total of the balances in the creditors’ accounts should agree with the balance of:

Multiple Choice



the Sales account in the general ledger.



the Purchases account in the general ledger.



the Accounts Receivable account in the general ledger.



the Accounts Payable account in the general ledger.

On Sept. 1, Jerry’s Lighting purchased merchandise with a list price of $7,600 with credit terms of 1/10, n/30. On Sept. 3, Jerry’s returns $900 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry’s Lighting is:

Multiple Choice



7,600.



6,633.



6,700.



7,524.

The objective of internal control of purchases is to:

Multiple Choice



create more organized invoices.



create a disciplined work environment.



make the sales process more complex.



create written proof that purchases and payments are authorized.

Purchases is a temporary _______ account.

Multiple Choice



liability



expense



revenue



asset

Which of the following accounts has a normal debit balance?

Multiple Choice



Accounts Payable



Sales



Purchases



Purchase Returns

If a business pays $1,100 on account to a creditor, the effect of the payment is a decrease to cash and a:

Multiple Choice



increase of capital.



decrease to accounts payable.



decrease to accounts receivable.



decrease to Fees Income.

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, their journal entry on April 5, to record the purchase, would include:

Multiple Choice



a debit to Accounts Payable for $1,000.



a debit to Merchandise Inventory for $1,000.



a credit to Merchandise Inventory for $16.



a debit to Purchases for $1,000.

When merchandise is ordered, the purchasing department issues a form called:

Multiple Choice



a purchase requisition.



a sale invoice.



a purchase invoice.



a purchase order.

The total of the individual creditor accounts in the subsidiary ledger must ________ the balance of the Accounts Payable control account.

Multiple Choice



be subtracted from



be greater than



be equal to



be less than

Assuming a periodic inventory system is used, the journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid and added to the invoice is:

Multiple Choice



debit Purchases $2,750; credit Accounts Payable $2,750.



debit Accounts Payable $2,875, credit Freight in $125; credit Purchases $2,750.



debit Accounts Receivable $2,875; credit Sales $2,875.



debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875.

The source document for recording a purchase of merchandise on credit is:

Multiple Choice



the purchase invoice.



the purchase order.



the purchase requisition.



the receiving report.

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, the journal entry on April 6, to record the return, would be:

DEBIT CREDIT

A) Accounts Payable 200

Cash 200

B) Accounts Payable 200

Purchase Returns and Allowances 200

C) Purchase Returns and Allowances 200

Accounts Payable 200

D) Accounts Payable 200

Merchandise Inventory 200

________________________________________

Multiple Choice



Option B.



Option D.



Option A.



Option C.

On Jan. 3, Gourmet Cakes sold $15,000 of merchandise, on account with terms 2/10, n/30, to Jerry Hines. Assuming that the original cost of the merchandise to Gourmet Cakes was $4,000 and the perpetualinventory system is used, the journal entry on Jan. 3, to record the sale, would be:

DEBIT CREDIT

A) Sales 15,000

Accounts Receivable/J.Hines 15,000

B) Accounts Receivable/J.Hines 15,000

Sales 15,000

Cost of Goods Sold 4,000

Merchandise Inventory 4,000

C) Accounts Payable/J.Hines 15,000

Sales 15,000

Merchandise Inventory 4,000

Cost of Goods Sold 4,000

D) Accounts Receivable/J.Hines 15,000

Sales 11,000

Cost of Goods Sold 4,000

________________________________________

Multiple Choice



Option C.



Option D.



Option A.



Option B.

During March a firm purchased $22,650 of merchandise and paid freight charges of $1,720. If the net delivered cost of purchases for the March is $21,900, what is the total purchase returns for March?

Multiple Choice



$970



$3,440



$0



$2,470

The amount of the purchases for a period is presented in:

Multiple Choice



the Revenue section of the income statement.



the Liabilities section of the balance sheet.



the Operating Expenses section of the income statement.



the Cost of Goods Sold section of the income statement.

Assuming a periodic inventory system, the journal entry to record the purchase on account of $900 of merchandise with freight of $65 prepaid and added to the invoice is:

Multiple Choice



debit Purchases $965; credit Accounts Payable $965.



debit Accounts Payable $965, debit Freight in $65; credit Purchases $900.



debit Purchases $900, debit Freight in $65; credit Accounts Payable $965.



debit Accounts Receivable $965; credit Sales $965.

A firm had purchases of $18,400, freight charges of $600, and purchases returns and allowances of $850 during one month. Its net delivered cost of purchases was:

Multiple Choice



$18,650.



$18,150.



$19,850.



$16,950.

During the year, a firm purchased $256,900 of merchandise and paid freight charges of $36,870. If the total purchases returns and allowances were $13,690 and purchase discounts were $9,160 for the year, what is the net delivered cost of purchases?

Multiple Choice



$197,180



$298,300



$270,920



$289,240

Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on credit includes:

Multiple Choice



a debit to Accounts Payable and a credit to Purchases.



a debit to Purchases and a credit to Accounts Receivable.



a credit to Purchases and a credit to Accounts Payable.



a debit to Purchases and a credit to Accounts Payable.

On Sept. 1, Jerry’s Lighting purchased merchandise with a list price of $12,500 with credit terms of 3/5, n/60. On Sept. 3, Jerry’s returns $1,300 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry’s Lighting is:

Multiple Choice



11,200.



12,125.



10,864.



10,640.

Assuming a periodic inventory system is used, identify the statement below that is ?

Multiple Choice



Freight charges that are listed on the invoice received from a supplier are not part of the total credit to Accounts Payable to record the credit purchase.



Another name that may be used for the Freight In account is “Transportation In.”



Freight In is subtracted from Purchases to arrive at delivered cost of purchases.



None of these statements are .

Freight – In is a(n) _________ account.

Multiple Choice



revenue



liability



expense



asset

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, the journal entry on April 13, to record the payment of the amount owed, would be:

DEBIT CREDIT

A) Accounts Payable 1,000

Cash 1,000

B) Accounts Reveivable 1,000

Sales Discounts 16

Cash 984

C) Accounts Payable 800

Merchandise Inventory 16

Cash 784

D) Accounts Payable 800

Purchase Discounts 16

Cash 784

________________________________________

Multiple Choice



Option D.



Option A.



Option B.



Option C.

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