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Accounting Chapter 9 Review

Total questions: 65

Worksheet time: 34mins

Name
Class
Date
1.
A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount.
a)
True
b)
False
2.
The petty cash account Cash Short and Over is a temporary account.
a)
True
b)
False
3.
 A corporation can own property, incur liabilities, and enter into contracts in its own name.
a)
True
b)
False
4.
A corporation exists independent of its owners.
a)
True
b)
False
5.
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.
a)
True
b)
False
6.
The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable.
a)
True
b)
False
7.
The contra account Purchases Discount has a normal debit balance.
a)
True
b)
False
8.
A merchandising business places Purchases in the Operating Expenses section of the income statement.
a)
True
b)
False
9.
The periodic inventory method does not require records of the quantity and cost of individual goods.
a)
True
b)
False
10.
The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable.
a)
True
b)
False
11.
A purchase of merchandise for cash would be posted
a)
a. individually to Purchases and individually to Accounts Payable.
b)
b. individually to Purchases.
c)
c. as part of a column total to Purchases.
d)
d. as part of column totals to Purchases and Accounts Payable.
12.
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
a)
a. $1,500.00.
b)
b. $900.00.
c)
c. $600.00.
d)
d. $882.00.
13.
The Purchases account is classified as a(n)
a)
a. expense account.
b)
b. asset account.
c)
c. liability account.
d)
d. cost of goods sold account.
14.
A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called a(n)
a)
a. perpetual inventory.
b)
b. inventory certification.
c)
c. audit verification.
d)
d. physical inventory.
15.
Supplies bought for use in a business are recorded in the
a)
a. Supplies Expense account.
b)
b. Supplies account.
c)
c. Purchases account.
d)
d. Cash account.
16.
An employee working with an account can trace a transaction back to the correct journal by using information in the
a)
a. Post. Ref. column.
b)
b. Item column.
c)
c. Purch. No. column.
d)
d. Vendor column.
17.
Since contra accounts are offsets to their related accounts, contra account normal balances are
a)
a. debits.
b)
b. credits.
c)
c. opposite the normal balances of their related accounts.
d)
d. the same as the normal balances of their related accounts.
18.
To replenish a $300.00 petty cash fund, if the petty cash custodian had receipts totaling$224.00 and cash of $74.00 in the petty cash box, one part of the journal entry is a
a)
a. debit to Cash Short and Over for $2.00.
b)
b. credit to Cash for $224.00.
c)
c. debit to Petty Cash for $224.00.
d)
d. credit to Cash Short and Over for $2.00.
19.
What is the special journal used to record only cash payment transactions ? 
a)
general amount column
b)
cash payments journal 
c)
purchases journal
d)
general ledger
20.
When a cash discount is given which column does it get put in ?
a)
General debit
b)
Accounts Payable Debit
c)
Cash Debit 
d)
Purchases Discount Credit
21.
What is 2/10 and n/30 ?
a)
The payment is due in 10 days and no discount.
b)
Pay within 30 days and get a 2 % discount 2 times within the 30 days.
c)
Get a 2 percent discount if you pay with 30 days.
d)
pay within 10 days and get a 2 % discount and the total invoice is due in 30 days .
22.

True or False ?

When a cash payment transaction occurs it is recorded in the purchases journal.

a)

True

b)

False

23.

Purchased merchandise from Polar Refrigeration for Cash $ 480.00 .What would get debited ?

a)

Accounts Payable

b)

Purchases Discount

c)

Cash

d)

General

24.
You would debit cash and credit purchases, when buying merchandise for cash
a)
true
b)
false
25.
Cost of Goods Sold is a section of the Chart of Accounts for a merchandising business
a)
true
b)
false
26.
Goods that a business purchases to sell are called
a)
merchandise
b)
services
c)
supplies
d)
none of these
27.

What is an organization with the legal rights of a person & which can be owned by many people?

a)

Proprietorship

b)

Merchandising business

c)

Vendor

d)

Corporation

28.

Which accounting concept is applied when the actual amount paid for merchandise is recorded?

a)

Going Concern

b)

Historical Cost

c)

Consistent Reporting

d)

Realization of Revenue

29.

The Purchases account is classified as which of the following types of accounts?

a)

A cost account

b)

An expense account

c)

An asset account

d)

A liability account

30.

What is the source document for a merchandise purchase on account?

a)

A memorandum

b)

A receipt

c)

A check

d)

An invoice

31.

Which of the following is true about the Purchases account?

a)

It is classified as an expense account

b)

It is decreased by a credit

c)

It is a permanent account

d)

It is used when both supplies and merchandise are purchased

32.

The name of a business that buys and resells merchandise to retail merchandising businesses?

a)

Retail merchandising business

b)

Vendor

c)

Wholesale merchandising business

d)

Outlet store

33.

What term describes the amount added to the cost of merchandise to establish a selling price?

a)

Cost of merchandise

b)

Retail price

c)

Sales price

d)

Markup

34.

The following accounts are contra accounts to the Purchase account

a)

Purchases, Purchases Returns and Allowances

b)

Purchases Returns and Allowances, Purchase Discounts

c)

Income Summary and Purchase Discounts

d)

Accounts Payable and Purchase Discounts

35.

How many general columns are on the Purchases Journal we use in class?

a)

1

b)

3

c)

2

d)

0

36.

On the Purchases Journal we use, what is the one special amount column heading we'll see?

a)

Accounts Payable Debit; Purchases Credit

b)

Purchases Debit; Accounts Payable Credit

c)

Cash Debit; Purchases Credit

d)

Purchases Debit; Cash Credit

37.

The source document for a cash purchase is a...

a)

Purchase Invoice

b)

Memo

c)

Check

d)

Debit Memo

38.

On a purchase invoice, what do the terms refer to?

a)

The businesses named on the invoice

b)

The length of time a customer has to pay

c)

The amount per item a customer has to pay

d)

The total amount on the invoice the customer has to pay

39.

Trade discounts are normally recorded in the purchases discount account?

a)

False

b)

True

40.

Purchases discount is increased by a credit?

a)

True

b)

False

41.

If actual petty cash on hand is $39, but records show that the balance should be $40....

a)

Petty Cash is Over

b)

Petty Cash is Short

c)

Petty Cash is Balanced

d)

What is Petty Cash?

42.

A journal is proved and ruled only at the end of the fiscal period.

a)

True

b)

False

43.

The normal balance for a Purchase Returns and Allowances is a credit.

a)

True

b)

False

44.

To begin a new journal page, the totals from the previous journal page are carried forward to the next journal page.

a)

True

b)

False

45.

Recording entries in a journal with special amount columns saves time.

a)

True

b)

False

46.

The cost account purchases issued only to record the value of merchandise purchased.

a)

True

b)

False

47.

Buying supplies on account is recorded in the general journal.

a)

True

b)

False

48.

A special journal entry is made to show the amount of a trade discount.

a)

True

b)

False

49.

A cash payments journal is a special journal used to record only cash payment transactions.

a)

True

b)

False

50.

A purchase allowance is a credit allowed for part of the purchase price of merchandise not returned.

a)

True

b)

False

51.
A business that purchases and resells goods is called a ___________
a)
Retail Store
b)
Wholesale Business
c)
Merchandising Business
52.

Classify the account Purchases

(a)  

53.

A purchase of merchandise for cash would be posted

a)

individually to Purchases and individually to Accounts Payable

b)

individually to Purchases

c)

as part of a column total to Purchases

d)

as part of column totals to Purchases and Accounts Payable

54.

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

a)

$1,500.00

b)

$600.00

c)

$900.00

d)

$882.00

55.

Supplies bought for use in a business are recorded in the

a)

Supplies Expense account

b)

Supplies account

c)

Purchases account

d)

Cash account

56.

To replenish a $300.00 petty cash fund, if the petty cash custodian had receipts totaling $224.00 and cash of $74.00 in the petty cash box, one part of the journal entry is a

a)

debit to Cash Short and Over for $2,00

b)

credit to Cash for $224.00

c)

debit to Petty Cash for $224.00

d)

credit to Cash Short and Over for $2.00

57.

If a stockholder of a corporation expects a business to exist beyond their lifetime and plans to give their shares of stock to their children, which accounting concept is being applied?

(a)  

58.

Which accounting concept is applied when merchandise and other items bought are recorded and reported at the purchase price?

(a)  

59.

Using an invoice as the source document for recording a purchase on account transaction would be applying which accounting concept?

(a)  

60.

What is the source document for merchandise purchased on account?

a)

Check

b)

Purchase invoice

c)

Memorandum

d)

Receipt

61.

What is the source document when merchandise is purchased for cash?

a)

Check

b)

Purchase invoice

c)

Memorandum

d)

Receipt

62.

What is the source document when a business pays for advertising?

a)

Check

b)

Purchase invoice

c)

Memorandum

d)

Receipt

63.

When replenishing the petty cash fund, what is the source document?

a)

Check

b)

Purchase invoice

c)

Memorandum

d)

Receipt

64.

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

a)

True

b)

False

65.

To replenish a $300.00 petty cash fund, if the petty cash custodian had receipts totaling $224.00 and cash of $74.00 in the petty cash box, one part of the journal entry is a

a)

debit to Cash Short and Over for $2.00

b)

credit to Cash for $224.00

c)

debit to Petty Cash for $224.00

d)

credit to Cash Short and Over for $2.00

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