Chapter 10 Accounting

A debit memorandum decreases which account on the buyer's books?

Accounts Payable

Which account is the controlling account for the amounts owed to individual creditors?

Accounts Payable in the general ledger

Perpetual Inventory System

An inventory system that keeps continual track of each type of inventory.

Cost of Goods Sold

In a perpetual inventory system an account that records the cost of merchandise inventory used to make a sale

When merchandise is bought for resale, which of the following accounts would be increased?

Merchandise Inventory

In the perpetual system, freight charges added to the buyer's invoice are debited to ___________ for the buyer.

Merchandise inventory

A form used in business to place an order for the buying of goods from a seller is:

Purchase order

F.O.B. shipping point

Purchaser pays for the shipping costs

F.O.B. destination

Seller pays for the cost of freight

Controlling Account

The account in the general ledger that summarized a subsidiary ledger.

Merchandise Inventory is what type of​ account?

asset

The term F.O.B shipping point is used, title passes:

when the goods are shipped

Accounts Payable Subsidiary Ledger

A book that contains in alphabetical order the name of the creditor and the amount owed from purchases on account.

Debit Memorandum

A form issued by a purchaser to a seller indicating that some purchases returns have occurred.

Purchase order

A form used in business to place an order for buying goods from a seller.

Merchandise Inventory

A perpetual inventory system account that records purchases of merchandise.

To prove the subsidiary ledger agrees with the Accounts Payable controlling account balance, complete a:

Schedule of Accounts Payable

Purchased office supplies on account. This will be recorded with:

a debit to Supplies and a credit to Accounts Payable

The normal balance for Merchandise Inventory is:

debit

A discount on merchandise purchased would be a:

debit to A/P and a credit to Merchandise Inventory

Using the perpetual inventory​ system, the purchase of merchandise on account would include​ a:

debit to Merchandise Inventory and a credit to Accounts Payable

The accounts payable subsidiary ledger:

lists accounts for which the company owes money, lists accounts alphabetically, has a controlling account in the general ledger