Reference no: EM13677283

1The supplier's invoice is the source document for a purchase on credit transaction.
True
False

2 The Purchases Returns and Allowances account has a normal debit balance.
True
false

3 The abbreviation P1 in the Posting Reference column of an account indicates that the data was posted from page 1 of the cash payments journal.
True
False
4 Freight In and Purchases Returns and Allowances are deducted from Purchases to determine the net delivered cost of purchases.
True
False
5 The type of account and normal balance of Purchase Returns and Allowances is a(n)
expense account, credit balance.
contra-revenue account, credit balance.
asset account, debit balance.
contra-cost of goods sold account, credit balance.

6 The journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid by their supplier and added to the invoice is:
debit Accounts Payable $2,875, debit Freight in $125; credit Purchases $2,750
debit Purchases $2,750; credit Accounts Payable $2,750
debit Accounts Receivable $2,875; credit Sales $2,875
debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875

7 A purchase of merchandise for cash should be recorded in the purchases journal.
True
False
8 If the perpetual inventory system is used to record the purchase and sale of goods, the account used to record shipping charges is the
freight in account.
purchases account.
merchandise inventory account.
transportation in account.

9 At the end of the accounting period the total of the accounts in the accounts payable subsidiary ledgers need not agree to the total in the firm's accounts payable ledger account.
True
False
10 Each individual entry in the purchases journal is posted to the general ledger at the end of each day.
True
False