WorksheetsAccounting Chapter 10 - Journalizing Purchases and Cash Payments
Total questions: 27
Worksheet time: 14mins
An agreement between a buyer and a seller about payment for merchandise.
merchandise
purchase invoice
terms of sale
cost of merchandise
The amount added to the cost of merchandise to establish the selling price.
markup
merchandising business
retail merchandising business
wholesale merchandising business
The price a business pays for goods it purchases to sell.
markup
cost of merchandise
partner
retail merchandising business
A business in which two or more persons combine their assets and skills.
vendor
partner
terms of sale
partnership
A business that purchases and sells goods.
merchandising business
retail business
wholesale merchandising business
cost of merchandise
A merchandising business that sells to those who use or consume the goods.
merchandising business
wholesale merchandising business
retail business
vendor
A business that buys and resells merchandise to retail merchandising businesses.
terms of sale
markup
partner
wholesale merchandising business
Goods that a merchandising business purchases to sell.
markup
merchandise
vendor
partnership
Each member of a partnership.
partnership
terms of sale
partner
vendor
An invoice used as a source document for recording a purchase on account transaction.
cost of merchandise
purchase invoice
terms of sale
retail merchandising business
A business from which merchandise is purchased or supplies or other assets are bought.
vendor
terms of sale
partner
partnership
When a business requires the skills of more than one person and needs more capital than one owner can provide, it should be organized as a proprietorship.
true
false
The main difference between a service business and a merchandising business is the journal used to record transactions.
true
false
When a business keeps its accounting records assuming that it will make money and continue in business indefinitely, it is applying the Consistent Reporting accounting concept.
true
false
An expanded journal should include a special amount column every kind of transaction the business might record.
true
false
Accounts related to the cost of merchandise are kept in the Revenue division in the general ledger chart of accounts.
true
false
The purchases account is increased by a credit and decreased by a debit.
true
false
To apply the Historical Cost accounting concept, merchandise purchased for sale should be recorded at its actual value even if a special sale price is granted.
true
false
A purchase invoice dated August 3 is received on August 5 and terms of sale are 20 days. Payment must be made by August 25.
true
false
Keeping the reports and financial records of a business separate from the personal records of the partners is an application of the accounting concept:
Going Concerns
Business Entity
Historical Cost
Objective Evidence
The purchases account is classified as:
an expense account
an asset account
a liability account
a cost account
The source document for a cash purchase is:
a memorandum
an invoice
a receipt
a check
The source document for recording a purchase on account transaction is a:
purchase invoice
sales invoice
memorandum
check
The entry to journalize a purchase of merchandise on account is:
debit Accounts Payable; credit Merchandise
debit Accounts Payable; credit Purchases
debit Purchases; credit Accounts Payable
debit Purchases; credit Merchandise
Supplies bought for use in a business are recorded in the:
supplies expense account
purchases account
supplies account
cash account
Assets taken out of a business for the personal use of an owner:
must be in the form of cash
are usually cash or merchandise
should be recorded as credits to the partners' drawing accounts
should be recorded as debits to the partners' capital accounts
When merchandise is withdrawn by a partner, the:
source document for the transaction is a check
balance of the purchase account is increased
other partner must also take an equal amount of merchandise out of the business for personal use
transaction will increase the balance of the drawing account and decrease the balance of the purchases account
