Unit 5 Review ACC1

Which of the following transactions would be recorded in the Purchases Journal?

• Buying equipment for cash

• Buying merchandise inventory on account from a supplier

• Paying an accounts payable with a check

• Purchasing office supplies with a debit card

When a business pays off an accounts payable, which journal should the transaction be recorded in?

• Sales Journal

• Cash Receipts Journal

• Cash Payments Journal

• Purchases Journal

A business purchases merchandise on account for $4,000. Which of the following correctly describes the journal entry and journal used?

• Debit Merchandise Inventory, Credit Accounts Payable — Cash Payments Journal

• Debit Accounts Payable, Credit Cash — Purchases Journal

• Debit Merchandise Inventory, Credit Accounts Payable — Purchases Journal

• Debit Cash, Credit Merchandise Inventory — Cash Receipts Journal

Which of the following correctly shows how paying a supplier for a previous credit purchase affects the accounting equation?

• Assets increase, liabilities increase

• Assets decrease, liabilities decrease

• Assets increase, liabilities decrease

• Assets decrease, owner’s equity increases

A business mistakenly records a cash payment to a supplier in the Purchases Journal instead of the Cash Payments Journal. What is the likely impact on the company’s financial records?

• Accounts Payable will be overstated, and Cash will be understated

• Accounts Payable will be understated, and Cash will be overstated

• Both Accounts Payable and Cash will be overstated

• Both Accounts Payable and Cash will be understated

A company makes the following transactions in one week:

• Purchased merchandise inventory for $6,000 on account

• Paid $3,500 to a supplier for a previous purchase

• Purchased office supplies for cash ($400)

• Paid monthly rent of $1,200

Which of the following correctly identifies which transactions should appear in each journal?

• Purchases Journal: all four transactions; Cash Payments Journal: none

• Purchases Journal: merchandise purchase; Cash Payments Journal: supplier payment, supplies purchase, rent payment

• Purchases Journal: merchandise purchase, office supplies purchase; Cash Payments Journal: supplier payment, rent payment

• Purchases Journal: supplier payment; Cash Payments Journal: merchandise purchase

Which transaction would be recorded in the Sales Journal?

• Sale of merchandise for cash

• Sale of merchandise on account

• Collection of cash from a customer

• Owner investing cash into the business

When a customer pays cash for a previous credit sale, which journal should the transaction be recorded in?

• Sales Journal

• Purchases Journal

• Cash Receipts Journal

• Cash Payments Journal

A business sells merchandise on account to a customer for $1,500. Which of the following is true regarding this transaction?

• It increases Accounts Payable and Cash

• It increases Accounts Receivable and Sales

• It decreases Accounts Receivable and increases Cash

• It increases Sales and decreases Accounts Payable

When receiving cash from a customer on account, which of the following describes the correct journal entry?

• Debit Sales, Credit Accounts Receivable

• Debit Cash, Credit Accounts Receivable

• Debit Accounts Receivable, Credit Sales

• Debit Cash, Credit Owner’s Equity