Ch 9 Accounting for Purchases and Cash Payments

A purchase of merchandise for cash would be posted

• as part of column totals to Purchases and Accounts Payable

• individually to Purchases and individually to Accounts Payable

• individually to Purchases

• as part of a column total to Purchases

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

• true

• false

The Purchases account is classified as a(n)

• cost of goods sold account

• expense account

• asset account

• liability account

A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called a(n)

• perpetual inventory

• inventory certification

• audit verification

• physical inventory

The petty cash account Cash Short and Over is a temporary account.

• true

• false

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

• true

• false

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

• true

• false

Supplies bought for the use in a business are recorded in the

• Supplies Expense account

• Purchases account

• Supplies account

• Cash account

Since contra accounts are offsets to their related accounts, contra account normal balances are

• debits

• credits

• opposite the normal balances of their related accounts

• the same as the normal balances of their related accounts

An employee working with an account can trace a transaction back to the correct journal by using information in the

• Post. Ref. column

• Item column

• Purch. No. column

• Vendor column