A discount on merchandise purchased is calculated by

multiplying the purchase amount by the discount rate

The journal entry for the purchase of merchandise on account is

debit Purchases and credit Accounts Payable

Purchases on account are recorded in the

accounts payable subsidiary ledger

To record the cash payment of a shipping charge, the journal entry is

debit Transportation In and credit Cash in Bank

To record a purchase return the accounts affected would be

A/P, A/P subsidiary, and Purchases R&A

The journal entry for recording purchases of merchandise for cash is

debit Purchases and credit Cash in Bank

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Ch. 15 Review (Glencoe) Strykowski

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Answers

1
A discount on merchandise purchased is calculated by
dividing the purchase amount by the discount rate
adding the discount rate to the purchase amount
subtracting the discount rate from the purchase amount
multiplying the purchase amount by the discount rate
2
A written offer to a supplier to buy certain items is called a
purchase requisition
merchandise request
purchase order
process order
3
The journal entry for the purchase of merchandise on account is
debit Accounts Payable and credit Purchases
debit Accounts Receivable and credit Purchases
debit Purchases and credit Accounts Receivable
debit Purchases and credit Accounts Payable
4
The account used to record the cost of merchandise purchased during the fiscal period is the
Merchandise account
Cost of Merchandise account
Sales account
Purchases account
5
The date an invoice is to be paid is called its
due date
arrival date
payment date
date of entry
6
When the supplier pays the shipping and insurance costs, the terms would be
shipping charge
FOB destination
FOB shipping point
FOB supplier
7
When a business keeps less than satisfactory merchandise & pays a reduced price it is called a
purchase discount
a subsidiary return
debit memorandum
purchase allowance
8
Purchases on account are recorded in the
accounts receivable subsidiary ledger
special ledger
accounts payable subsidiary ledger
purchase order file
9
To record the cash payment of a shipping charge, the journal entry is
debit Transportation In and credit Cash in Bank
debit Cash in Bank and credit Transportation In
debit Transportation In and credit Accounts Payable
debit Accounts Payable and credit Transportation In
10
a written request that a certain item be purchased is called a
merchandise request
process order
purchase requisition
purchase order
11
The purchase of insurance is recorded in
Supplies
Miscellaneous Expense
Insurance Expense
Prepaid Insurance
12
Bankcard fee is
a revenue account
an expense account
a liability account
an asset account
13
Insurance, when purchased, is considered
an expense
an asset
a liability
owner`s equity
14
To record a purchase return the accounts affected would be
A/P, A/P subsidiary, and Sales
A/P and Purchases R&A
A/P, A/P subsidiary, and Purchases R&A
A/R, A/R subsidiary, and Sales
15
A notice to suppliers of a return or to request an allowance is called
a credit memorandum
a discount memorandum
a purchase allowance
a debit memorandum
16
An offer to charge customers to reduce their sale for early payment is called a
merchandise discount
purchases discount
revenue reduction
trade discount
17
A form that lists the items included in shipment is called a
laundry list
packing slip
requisition slip
shipping slip
18
The cost of insurance protection is called
an installment
a loan
a policy
a premium
19
The journal entry for recording purchases of merchandise for cash is
debit Accounts Receivable and credit Purchases
debit Purchases and credit Cash in Bank
debit Purchases and credit Accounts Receivable
debit Cash in Bank and credit Purchases

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