Acct:15

Issued a check to Tiger's Trucking company for delivery of merchandise purchased from Gary Wholesalers.

Debit:Transportation In Credit: Cash in Bank

Where are shipping charges recorded in

Transportation in

1 example of a good internal control procedure requires that all cash payments be authorized

True

A purchase order is prepared by the buyer and sent to the suppliers as an offer to purchase merchandise or other assets

True

A tickler file contains folders for each day of the month so that invoices can be placed in the folders according to their due dates

True

Accounts Payable is a controlling account and it is found in the general ledger

True

If the invoice states FOB shipping point, it is the buyer's responsibility to pay the shipping charges from the sellers location

True

In a manual accounting system, the creditors' accounts in the accounts payable subsidiary ledger are listed in alphabetical order

True

Prepared insurance is classified as an asset account

True

The premium paid for insurance coverage is debited to the asset account, Prepaid Insurance.

True

The purchases account is a temporary equity account

True

The source document for recording the purchase of merchandise on account is an invoice

True

When a diagonal sign is placed in the Posting Reference column, this indicates that two postings are to be made.

True

Whether merchandise is purchased for cash or credit, the Purchases account is always debited.

True

A purchase returns and allowances transaction must be posted to the

accounts payable account and the creditor's account

ledger that contains all accounts for all creditors and the amount owed to each

accounts payable subsidiary ledger

The purchases accounts is debited when

merchandise is bought for resale, on account, and is bought for cash

a form that list the items included in a shipment

packing slip

amount paid for insurance

premium

stamp placed on an invoice that outlines a set of steps to be followed in making the invoice for payment

processing stamp

written offer to suppliers to buy certain items

purchase order

a written request that a certain item or items be ordered

purchase requisition

account used to record the cost of new merchandise

purchases account

cash discount offered by suppliers for prompt payment

purchases discount

Purchased Merchandise for cash.

Debit: Purchases Credit: Cash in Bank

Bought an ad in the local newspaper paying cash.

Debit:Advertising Expense Credit: Cash in Bank

If the invoice amount is 1,200 and the credit term are 3/15,n/45, the amount of the discount is

$36

What are the characteristics of a Transportation In Account?

- it's classified as a cost of merchandise account -it's balance and increase side is a debit -it's decrease side is a credit -it's balance shows the cost of delivery charges for merchandise

Issued a debit memo to a creditor for returned merchandise

Debit:Accounts Payable/ Creditor Credit:Sales Returns and Allowances

Purchased merchandise on account.

Debit:Purchases Credit:Accounts Payable/ Creditor

The purchases account is what type of account

Contra

Purchase Returns and Allowances

Credit

Purchases Discount

Credit

Wrote a check in payment of annual insurance premium for the business.

Debit: Prepaid Insurance Credit: Cash in Bank

Bankcard Fees Expense

Debit

Purchases

Debit

Transportation In

Debit

the form a buisness uses to notify it's supplier of a return or allowance

Debit Memo

Issued a check to a creditor in payment of an invoice less a cash discount.

Debit: Accounts Payable/ Creditor Credit: Cash in Bank Purchases Discounts

buyer pays the shipping charge from the supplier's place of business

FOB Shipping Point

supplier pays the shipping cost to the buyer's location

FOB destination

A business must write a check to pay the bank for service charges and bankcard fees charged to its checking account

False

A cash discount is an advantage to the buyer, but not the seller

False

Bank charges and bankcard fees are paid by check.

False

Creditor accounts in the accounts payable subsidiary ledger normally have debit balance

False

If the date of the invoice is October 1 and terms are 2/10, n/30 a discount may be taken if the invoice is paid on or before October 31st

False

Invoices are placed in a tickler file according to their invoice numbers

False

Shipping charges are always paid by the seller

False

The discount period is calculated from the day the invoice was received

False

The purchases account is used to record the sale of merchandise on account

False

Where's a processing stamp placed on?

Invoice

A box of merchandise received by a business would include

Packing slip

a price reduction received by business for unsatisfactory merchandise kept

Purchase Allowance

When a business returns merchandise to the seller on full credit, what occurs?

Purchase return

What account is used to record the merchandise purchased by the business for resale

Purchases

What occurs when a business returns merchandise bought on account to a supplier for full credit?

Purchases Returns

charged by the bank for handling bankcard sales slips deposited by a business; it is usually calculated as a percentage of the total bankcard sales

bankcard fees expense

the actual cost to the business of the merchandise to be sold to the customers

cost of merchandise

a bill that lists the credit terms and the quantity, description, unit price, and total cost of items shipped to the buyer

invoice

document prepared by the seller

invoice

period of time within which an invoice must be paid if a discount is to be taken

discount period

date by which the invoice must be paid

due date

contains a folder for each day of the month

tickler file

cost of merchandise account that is used to record shipping charges on goods

transportation in account