ACC 291T Week 2 Practice: Connect® Knowledge Check

Complete the Week 2 Knowledge Check in Connect®.

Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded.

These assignments have earlier due dates, so plan accordingly.

Grades must be transferred manually to eCampus by your instructor. Don't worry, this might happen after your due date.

Assuming a periodic inventory system is used, freight charges on merchandise purchases should be debited to:

Multiple Choice

•  

the creditor's account in the subsidiary ledger.

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the Freight In account.

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the Purchases account.

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the Accounts Payable account.

Which of the following statements is ?

Multiple Choice

•  

Purchases Discounts is a contra expense account with a normal credit balance.

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Purchases Discounts is a revenue account with a normal credit balance.

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Purchases Discounts is an asset account with a normal credit balance.

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Purchases Discounts is an expense account with a normal debit balance.

Which of the following statements is ?

Multiple Choice

•  

The person who ordered the goods should also authorize payment.

•  

Purchase requisitions do not need to be printed on pre-numbered forms.

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Calculations on an invoice are assumed to be  if computer generated.

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Purchases should be made only after receiving proper written authorization.

On Oct 1, Jerry's Lighting purchased merchandise with a list price of $5,000 with credit terms of 1/10, n/30. On Oct 3, Jerry's returns $500 of the merchandise. Assuming a periodic inventory system is used and Jerry's pays the remaining amount owed on the purchase within the discount period, Jerry's journal entry to record the payment, would include:

Multiple Choice

•  

a debit to Accounts Receivable for $4,500.

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a debit to Purchase Discounts for $45.

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a debit to Accounts Payable for $4,500.

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a debit to Merchandise Inventory for $45.

When a payment is due is determined by the invoice date and the:

Multiple Choice

•  

transportation schedule.

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accounting cycle.

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credit terms.

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delivery date.

Which of the following statements is ?

Multiple Choice

•  

The credit terms, 2/10, n/30, allow the customer to take a 2 percent discount if payment is made within 10 days of the invoice, otherwise payment is due in full in 30 days.

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The Purchases account is reported as an asset on the balance sheet.

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The purchase requisition is the form sent to a supplier to order goods.

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To the customer, a supplier's invoice is a sales invoice.

The Purchases account is:

Multiple Choice

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a subsidiary account.

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a liability account.

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a temporary account.

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a permanent account.

Postings to the accounts payable ledger should be made:

Multiple Choice

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daily.

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monthly.

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at the end of the fiscal period.

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weekly.

Tune Tones Instrument Tuning Company owes Mandy Lynn's Music Studio $6,854 as of November 1. During November, Tune Tones purchased merchandise from Mandy Lynn totaling $9,548 and made payments on account to Mandy Lynn in the amount of $7,250. The amount Tune Tones owes Mandy Lynn on November 30 is:

Multiple Choice

•  

$4,556.

•  

$9,152.

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$9,548.

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$6,854.

The total of the balances in the creditors' accounts should agree with the balance of:

Multiple Choice

•  

the Sales account in the general ledger.

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the Purchases account in the general ledger.

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the Accounts Receivable account in the general ledger.

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the Accounts Payable account in the general ledger.

On Sept. 1, Jerry’s Lighting purchased merchandise with a list price of $7,600 with credit terms of 1/10, n/30. On Sept. 3, Jerry’s returns $900 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry’s Lighting is:

Multiple Choice

•  

7,600.

•  

6,633.

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6,700.

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7,524.

The objective of internal control of purchases is to:

Multiple Choice

•  

create more organized invoices.

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create a disciplined work environment.

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make the sales process more complex.

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create written proof that purchases and payments are authorized.

Purchases is a temporary _______ account.

Multiple Choice

•  

liability

•  

expense

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revenue

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asset

Which of the following accounts has a normal debit balance?

Multiple Choice

•  

Accounts Payable

•  

Sales

•  

Purchases

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Purchase Returns

If a business pays $1,100 on account to a creditor, the effect of the payment is a decrease to cash and a:

Multiple Choice

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increase of capital.

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decrease to accounts payable.

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decrease to accounts receivable.

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decrease to Fees Income.

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, their journal entry on April 5, to record the purchase, would include:

Multiple Choice

•  

a debit to Accounts Payable for $1,000.

•  

a debit to Merchandise Inventory for $1,000.

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a credit to Merchandise Inventory for $16.

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a debit to Purchases for $1,000.

When merchandise is ordered, the purchasing department issues a form called:

Multiple Choice

•  

a purchase requisition.

•  

a sale invoice.

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a purchase invoice.

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a purchase order.

The total of the individual creditor accounts in the subsidiary ledger must ________ the balance of the Accounts Payable control account.

Multiple Choice

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be subtracted from

•  

be greater than

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be equal to

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be less than

Assuming a periodic inventory system is used, the journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid and added to the invoice is:

Multiple Choice

•  

debit Purchases $2,750; credit Accounts Payable $2,750.

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debit Accounts Payable $2,875, credit Freight in $125; credit Purchases $2,750.

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debit Accounts Receivable $2,875; credit Sales $2,875.

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debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875.

The source document for recording a purchase of merchandise on credit is:

Multiple Choice

•  

the purchase invoice.

•  

the purchase order.

•  

the purchase requisition.

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the receiving report.

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, the journal entry on April 6, to record the return, would be:

  DEBIT CREDIT

A) Accounts Payable 200  

  Cash 200

B) Accounts Payable 200  

  Purchase Returns and Allowances 200

C) Purchase Returns and Allowances 200  

  Accounts Payable 200

D) Accounts Payable 200  

  Merchandise Inventory 200

________________________________________

Multiple Choice

•  

Option B.

•  

Option D.

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Option A.

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Option C.

On Jan. 3, Gourmet Cakes sold $15,000 of merchandise, on account with terms 2/10, n/30, to Jerry Hines. Assuming that the original cost of the merchandise to Gourmet Cakes was $4,000 and the perpetualinventory system is used, the journal entry on Jan. 3, to record the sale, would be:

  DEBIT CREDIT

A) Sales 15,000  

  Accounts Receivable/J.Hines 15,000

B) Accounts Receivable/J.Hines 15,000  

  Sales 15,000

  Cost of Goods Sold 4,000  

  Merchandise Inventory 4,000

C) Accounts Payable/J.Hines 15,000  

  Sales 15,000

  Merchandise Inventory 4,000  

  Cost of Goods Sold 4,000

D) Accounts Receivable/J.Hines 15,000  

  Sales 11,000

  Cost of Goods Sold 4,000

________________________________________

Multiple Choice

•  

Option C.

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Option D.

•  

Option A.

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Option B.

During March a firm purchased $22,650 of merchandise and paid freight charges of $1,720. If the net delivered cost of purchases for the March is $21,900, what is the total purchase returns for March?

Multiple Choice

•  

$970

•  

$3,440

•  

$0

•  

$2,470

The amount of the purchases for a period is presented in:

Multiple Choice

•  

the Revenue section of the income statement.

•  

the Liabilities section of the balance sheet.

•  

the Operating Expenses section of the income statement.

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the Cost of Goods Sold section of the income statement.

Assuming a periodic inventory system, the journal entry to record the purchase on account of $900 of merchandise with freight of $65 prepaid and added to the invoice is:

Multiple Choice

•  

debit Purchases $965; credit Accounts Payable $965.

•  

debit Accounts Payable $965, debit Freight in $65; credit Purchases $900.

•  

debit Purchases $900, debit Freight in $65; credit Accounts Payable $965.

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debit Accounts Receivable $965; credit Sales $965.

Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on credit includes:

Multiple Choice

•  

a debit to Accounts Payable and a credit to Purchases.

•  

a debit to Purchases and a credit to Accounts Receivable.

•  

a credit to Purchases and a credit to Accounts Payable.

•  

a debit to Purchases and a credit to Accounts Payable.

On Sept. 1, Jerry’s Lighting purchased merchandise with a list price of $12,500 with credit terms of 3/5, n/60. On Sept. 3, Jerry’s returns $1,300 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry’s Lighting is:

Multiple Choice

•  

11,200.

•  

12,125.

•  

10,864.

•  

10,640.

Assuming a periodic inventory system is used, identify the statement below that is ?

Multiple Choice

•  

Freight charges that are listed on the invoice received from a supplier are not part of the total credit to Accounts Payable to record the credit purchase.

•  

Another name that may be used for the Freight In account is "Transportation In."

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Freight In is subtracted from Purchases to arrive at delivered cost of purchases.

•  

None of these statements are .

Freight – In is a(n) _________ account.

Multiple Choice

•  

revenue

•  

liability

•  

expense

•  

asset

On April 5, Fair Coffee, Inc. purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, the journal entry on April 13, to record the payment of the amount owed, would be:

  DEBIT CREDIT

A) Accounts Payable 1,000  

  Cash 1,000

B) Accounts Reveivable 1,000  

  Sales Discounts 16

  Cash 984

C) Accounts Payable 800  

  Merchandise Inventory 16

  Cash 784

D) Accounts Payable 800  

  Purchase Discounts 16

  Cash 784

________________________________________  

Multiple Choice

•  

Option D.

•  

Option A.

•  

Option B.

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Option C.