Question 1
Returned merchandise for credit under the perpetual inventory method. This will be recorded with:
a debit to Accounts Payable and a credit to Merchandise Inventory.
a debit to Accounts Payable and a credit to Purchases Returns and Allowances.
a debit to Purchase Returns and Allowances and a credit to Merchandise Inventory.
a credit to Accounts Payable and a debit to Merchandise Inventory.
Question 2
When using a perpetual inventory method, what account(s) must be updated when a sale is recognized?
Supplies
Cost of Goods Sold
Both A and C are correct.
Merchandise Inventory
Question 3
Merchandise Inventory is what type of account?
Contra-Asset
Expense
Asset
Liability
Question 4
Returned merchandise for credit on account. The perpetual inventory system is in use. This will be recorded with:
a debit to an asset and a credit to a liability.
a debit to a liability and a credit to an asset.
a debit to a liability and a credit to an expense.
a debit to an asset and a credit to an expense.
Question- Sue's Jewelry sold 30 necklaces for $25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include:
a credit to Sales Tax Payable for $7.50.
a debit to Sales Returns and Allowances for $125.00.
a debit to Accounts Receivable for $132.50.
a debit to Sales Returns and Allowances for $132.50.
Question 5
When completing a worksheet:
the ending inventory amount appears in the income statement debit column.
the beginning inventory amount appears in the balance sheet debit column of the worksheet.
the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet.
the beginning inventory amount appears in the adjustment credit column.
Question 6
Sales Returns and Allowances is a contra-revenue account with a normal debit balance.
True
False
Question 7
An example of a subsidiary ledger is the revenue ledger.
True
False
Question 8
Accounts in the accounts receivable subsidiary ledger are listed alphabetically.
True
False
Question 9
The balance in the Accounts Receivable account is $2,200 debit. Therefore, the balances in the subsidiary ledger should be $2,000.
True
False
Question 10
The controlling account is found in the subsidiary ledger and it summarizes or controls the general ledger account.
True
False
Question 11
The accounts receivable subsidiary ledger shows the amount collected from each customer.
True
False
Question 12
When you record the entry to the subsidiary ledger and place the checkmark in the PR column, it is necessary to post to the Accounts Receivable controlling account.
True
False
Question 13
The general ledger and the accounts receivable subsidiary ledger are the same book.
True
False
Question 14
Using the perpetual inventory system, the purchase of merchandise on account would include a:
debit to Merchandise Inventory and a credit to Accounts Payable.
debit to Sales and a credit to Accounts Receivable.
debit to Accounts Payable and a credit to Merchandise Inventory.
debit to Merchandise Inventory and a credit to Sales.
Question 15
The return of merchandise to the supplier for credit using the perpetual inventory system would include a:
debit to Accounts Payable and a credit to Merchandise Inventory.
debit to Accounts Receivable and a credit to Accounts Payable.
debit to Accounts Payable and a credit to Purchases Returns and Allowances.
debit to Sales Returns and Allowances and a credit to Merchandise Inventory.
Question 16
The recording of the cost of freight-in under the perpetual inventory system would include a:
credit to Freight-In.
credit to Merchandise Inventory.
debit to Freight-In.
debit to Merchandise Inventory.
Question 17
The account used in perpetual inventory to record the cost of inventory used to make the sale is:
Purchases Returns and Allowances.
Purchases Discounts.
Purchases.
Cost of Goods Sold.