Chapter 9: Accounting for Purchases and Cash Payments

Front

A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount

Back

False

Front

A corporation can own property, incur liabilities, and enter into contracts in its own name

Back

True

Front

The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.

Back

False

Front

The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable

Back

True

Front

Classify the account Purchases: Cost of Merchandise, Cost of Merchandise Sold, Cost of Goods, Cost of Goods Sold

Back

Cost of Merchandise, Cost of Merchandise Sold, Cost of Goods, Cost of Goods Sold

Front

Classify the account Purchases Discount

Back

Contra Purchases

Front

The periodic inventory method does not require records of the quantity and cost of individual goods.

Back

True

Front

A purchase of merchandise for cash would be posted

Back

individually to Purchases

Front

Merchandise with a list price of $1,500.00 is purchased on account for $900.00 on August 1. Terms of sale are 2/10, n/30. Payment is made on August 17. The amount paid should be

Back

$900.00

Front

Supplies bought for use in a business are recorded in the

Back

Supplies account