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Exam 8: Accounting for Purchases and Accounts Payable

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Question 51

Multiple Choice

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The entry to record a purchase of merchandise on credit includes

A) a debit to Purchases and a credit to Accounts Receivable.
B) a credit to Purchases and a credit to Accounts Payable.
C) a debit to Accounts Payable and a credit to Purchases.
D) a debit to Purchases and a credit to Accounts Payable.

E) A) and D)
F) None of the above

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Question 52

Multiple Choice

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Best Value Furniture uses the periodic inventory system to account for its inventory.It purchased $2,000 of goods from its supplier but later returned $400 of the goods due to damage.Best Value would record the return by:

A) debiting Accounts Payable,crediting Purchases
B) debiting Sales Returns and Allowances,crediting Accounts Receivable
C) debiting Accounts Payable,crediting Purchases Purchase Returns and Allowances
D) debiting Purchase Returns and Allowances,crediting Accounts Payable

E) B) and C)
F) All of the above

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Question 53

Essay

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At the end of September 2016 and before the purchases journal was posted,selected general ledger account balances for Paper Products were as follows (each account had a normal balance): The purchases journal had the following totals: Purchases,$19,540;Freight In,$1,225;Accounts Payable,$20,765. Calculate the ending balance of each of the three accounts after the posting from the purchases journal.Indicate whether each balance is a debit or credit.

A creditor's account in the accounts payable ledger has a balance of $10,560 as of April 1.After a transaction of $12,800 is posted from the purchases journal and a transaction of $9,200 is posted from the cash payments journal,the balance of the creditor's account on April 30 is:

One of the supplier accounts from the accounts payable ledger for Paragon Video is shown below.Explain each of the entries that have been posted to this supplier's subsidiary ledger account.

In a firm that uses special journals,the purchase of merchandise for $2,800,payable in 30 days,plus a freight charge of $140 is recorded in the

Each individual entry in the purchases journal is posted to the general ledger at the end of each day.

On November 30,2016,the general ledger of Hinges and More Hardware,a retail store,showed the following balances: Purchases,$136,750;Freight In,$2,500;Purchases Returns and Allowances,$4,000. Determine the following: A)What was the delivered cost of purchases for November? B)What was the net delivered cost of purchases for November?

Nice Guys Apparel received a $200 credit memorandum as an allowance for goods that it returned to one of its suppliers.Identify the statement below that would be correct when posting the transaction.