20 MCQ Jackson purchased $500 of goods and received credit terms

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Question 1 of 20 5.0 Points
Jackson purchased $500 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period?

A. $450

B. $510

C. $500

D. $490

Question 2 of 20 5.0 Points
When the term F.O.B. shipping point is used, title passes when the

A. goods reach the halfway point.

B. goods reach the destination.

C. goods are shipped.

D. buyer unpacks the goods.

Question 3 of 20 5.0 Points
A debit memorandum increases which account on the buyer’s books?

A. Accounts Payable

B. Purchases Returns and Allowances

C. Sales Returns and Allowances

D. Accounts Receivable

Question 4 of 20 5.0 Points
Medeco bought goods for $250 on credit. Medeco returned $50 worth of goods. Terms of the sale were 2/10, n/30. If Medeco pays the amount owed within the discount period, what is the amount it should pay?

A. $250

B. $204

C. $196

D. $200

Question 5 of 20 5.0 Points
On April 30, Miller’s Bike Goods purchased $600 of merchandise on account from the Spark Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Spark Company and added to the invoice. The amount to record in the Purchases account is

A. $650.

B. $640.

C. $550.

D. $450.

Question 6 of 20 5.0 Points
To prove that the subsidiary ledger agrees with the Accounts Payable controlling account balance, complete a

A. debit memorandum.

B. schedule of accounts payable.

C. purchase order.

D. schedule of accounts receivable.
Question 7 of 20 5.0 Points
The Accounts Payable subsidiary ledger

A. lists accounts alphabetically.

B. lists accounts for which the company owes money.

C. has a controlling account in the general ledger.

D. All of the above

Question 8 of 20 5.0 Points
The normal balance for Purchases Returns and Allowances is

A. a debit.

B. a credit.

C. zero.

D. It doesn’t have a normal balance.

Question 9 of 20 5.0 Points
If merchandise was returned under the periodic inventory method, this will be recorded with a

A. debit to Accounts Payable and a credit to Purchases Returns and Allowances.

B. debit to Merchandise Inventory and a credit to Purchases.

C. credit to Accounts Payable and a debit to Merchandise Inventory.

D. debit to Accounts Payable and a credit to Merchandise Inventory.

Question 10 of 20 5.0 Points
A debit memorandum decreases which account on the seller’s books?

A. Accounts Payable

B. Purchases Returns and Allowances

C. Sales Returns and Allowances

D. Accounts Receivable

Question 11 of 20 5.0 Points
On February 12, Clare purchased $400 of merchandise on account from Larsen’s Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is

A. $392.

B. $408.

C. $400.

D. $440.

Question 12 of 20 5.0 Points
If a display rack was purchased for the store, which account would be increased?

A. Store Equipment

B. Purchases

C. Cash

D. Capital

Question 13 of 20 5.0 Points
Heidi’s Accessories bought 50 necklaces for $10 each on account. The invoice included a 6% sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the payment (within the discount period) would include a credit to

A. Cash for $477.

B. Cash for $468.

C. Accounts Receivable for $477.

D. Accounts Receivable for $468.

Question 14 of 20 5.0 Points
On November 30, Janoch’s Dog Kennel purchased $600 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Ganster Company and added to the invoice. The amount to record in the Purchases account is

A. $600.

B. $640.

C. $560.

D. $550.

Question 15 of 20 5.0 Points
When merchandise is bought for resale, which account would be decreased?

A. Store Equipment

B. Purchases

C. Cash

D. Capital
Question 16 of 20 5.0 Points
Hardware Restoration had net purchases of $50,000. If Purchases Returns and Allowances are $10,000 and Purchases Discounts are $1,500, what are gross purchases?

A. $38,500

B. $50,000

C. $61,500

D. $40,000

Question 17 of 20 5.0 Points
The entry to record a purchase of $5,000 on account, terms of 2/10, n/30, would include a

A. debit to Purchases Discount for $100.

B. credit to Accounts Payable for $5,000.

C. debit to Accounts Payable for $5,000.

D. credit to Cash for $5,000.

Question 18 of 20 5.0 Points

A. O.B. shipping point means

B. the buyer pays for the freight.

C. the seller pays for the freight.

D. the title passes at time of shipment.

E. Both A and C*

*Note: It looks like the actual question is in choice A and the answers go from B-E. Answer E would be correct if it went from A-D. This would be the probably answer.
Question 19 of 20 5.0 Points
Merchandise paid for within the discount period for a Cash refund was returned. This will be recorded with a

A. credit to a liability.

B. credit to an asset.

C. debit to a liability.

D. debit to an asset.

Question 20 of 20 5.0 Points
Purchases are a/an

A. cost.

B. asset.

C. liability.

D. revenue.

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