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- 1. Multiple ChoiceA transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount.TrueFalse
- 2. Multiple ChoiceThe petty cash account Cash Short and Over is a temporary account.TrueFalse
- 3. Multiple ChoiceA corporation can own property, incur liabilities, and enter into contracts in its own name.TrueFalse
- 4. Multiple ChoiceA corporation exists independent of its owners.TrueFalse
- 5. Multiple ChoiceThe 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.TrueFalse
- 6. Multiple ChoiceThe total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable.TrueFalse
- 7. Multiple ChoiceThe contra account Purchases Discount has a normal debit balance.TrueFalse
- 8. Multiple ChoiceA merchandising business places Purchases in the Operating Expenses section of the income statement.TrueFalse
- 9. Multiple ChoiceThe periodic inventory method does not require records of the quantity and cost of individual goods.TrueFalse
- 10. Multiple ChoiceThe total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable.TrueFalse
- 11. Multiple ChoiceA purchase of merchandise for cash would be posteda. 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.
- 12. Multiple ChoiceMerchandise 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 bea. $1,500.00.b. $900.00.c. $600.00.d. $882.00.
- 13. Multiple ChoiceThe Purchases account is classified as a(n)a. expense account.b. asset account.c. liability account.d. cost of goods sold account.
- 14. Multiple ChoiceA periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called a(n)a. perpetual inventory.b. inventory certification.c. audit verification.d. physical inventory.
- 15. Multiple ChoiceSupplies bought for use in a business are recorded in thea. Supplies Expense account.b. Supplies account.c. Purchases account.d. Cash account.
- 16. Multiple ChoiceAn employee working with an account can trace a transaction back to the correct journal by using information in thea. Post. Ref. column.b. Item column.c. Purch. No. column.d. Vendor column.
- 17. Multiple ChoiceSince contra accounts are offsets to their related accounts, contra account normal balances area. debits.b. credits.c. opposite the normal balances of their related accounts.d. the same as the normal balances of their related accounts.
- 18. Multiple ChoiceTo 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 aa. 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.
- 19. Multiple Choice
A merchandising business that sells to those who use or consume the goods
retail merchandising business
wholesale merchandising business
corporation
stockholder
- 20. Multiple Choice
A business that buys and resells merchandise primarily to other merchandising businesses
retail merchandising business
wholesale merchandising business
corporation
stockholder
- 21. Multiple Choice
An organization with the legal rights of a person which many persons or other corporations may own
retail merchandising business
wholesale merchandising business
corporation
stockholder
- 22. Multiple Choice
The owner of one or more shares of stock
retail merchandising business
wholesale merchandising business
corporation
stockholder
- 23. Multiple Choice
Each unit of ownership in a corporation
share of stock
articles of incorporation
controlling account
terms of sale
- 24. Multiple Choice
A legal document that identifies basic characteristics of a corporation
share of stock
articles of incorporation
controlling account
terms of sale
- 25. Multiple Choice
An account in the general ledger that summarizes all accounts in a subsidiary ledger
special journal
contra account
controlling account
master account
- 26. Multiple Choice
An account that reduces a related account on a financial statement
special journal
contra account
controlling account
master account
- 27. Multiple Choice
A journal used to record only one kind of transaction
special journal
contra journal
controlling journal
master journal
- 28. Multiple Choice
The retail price listed in a catalog or on an Internet site
list price
trade discount
credit limit
terms of sale
- 29. Multiple Choice
The reduction in the list price granted to a merchandising business
list price
trade discount
net price
cash discount
- 30. Multiple Choice
An agreement between a buyer and a seller about payment for merchandise
list price
trade discount
net price
terms of sale
- 31. Multiple Choice
A merchandise inventory evaluated at the end of a fiscal period
periodic inventory
perpetual inventory
requisition
purchase order
- 32. Multiple Choice
An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand for each item
periodic inventory
perpetual inventory
requisition
purchase order
- 33. Multiple Choice
A form requesting the purchase of merchandise
periodic inventory
perpetual inventory
requisition
purchase order
- 34. Multiple Choice
A form requesting that a vendor sell merchandise to a business
periodic inventory
perpetual inventory
requisition
purchase order
- 35. Multiple Choice
The deduction that a vendor allows on an invoice to encourage prompt payment
list price
trade discount
credit limit
cash discount
- 36. Multiple Choice
The maximum outstanding balance allowed to a customer by a vendor.
list price
trade discount
credit limit
cash discount
- 37. Multiple Choice
A journal amount column that is not headed with an account title.
general amount column
special amount column
empty amount column
basic amount column
- 38. Multiple Choice
A listing of vendor accounts, account balances, and the total amount due to all vendors
schedule of accounts receivable
schedule of amounts receivable
schedule of accounts payable
schedule of amounts payable
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