{"id":7684,"date":"2021-10-14T03:37:54","date_gmt":"2021-10-14T03:37:54","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/1-net-purchases-are-a-purchases-purchases-returns-and\/"},"modified":"2021-10-14T03:37:54","modified_gmt":"2021-10-14T03:37:54","slug":"1-net-purchases-are-a-purchases-purchases-returns-and","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/1-net-purchases-are-a-purchases-purchases-returns-and\/","title":{"rendered":"1. net purchases are: a) purchases + purchases returns and"},"content":{"rendered":"
\n

1. \u00a0Net purchases are:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) Purchases + Purchases Returns and Allowances.\u00a0<\/p>\n

\u00a0B) Purchases – Purchases Discount – Purchases Returns and Allowances.\u00a0<\/p>\n

\u00a0C) Purchases – Freight – Purchases Returns and Allowances.\u00a0<\/p>\n

\u00a0D) Purchases + Freight-In.\u00a0<\/p>\n

\u00a0<\/p>\n

2. \u00a0Purchases is a(n):\u00a0<\/p>\n

\u00a0A) cost.\u00a0<\/p>\n

\u00a0B) asset.\u00a0<\/p>\n

\u00a0C) liability.\u00a0<\/p>\n

\u00a0D) revenue.\u00a0<\/p>\n

\u00a0<\/p>\n

3. \u00a0A cost account is treated the same as:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) a liability.\u00a0<\/p>\n

\u00a0B) Capital.\u00a0<\/p>\n

\u00a0C) a revenue.\u00a0<\/p>\n

\u00a0D) an expense.\u00a0<\/p>\n

\u00a0<\/p>\n

4. \u00a0Jackie’s Online Service on April 30 has the following account balances:<\/p>\n

\u00a0<\/p>\n

Sales \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$20,000<\/p>\n

Sales returns and allowances \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a02,000<\/p>\n

Purchases \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a014,000<\/p>\n

Freight-In \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 1,000<\/p>\n

Purchases Returns and allow. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 2,000<\/p>\n

Purchases Discounts \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 1,400<\/p>\n

\u00a0<\/p>\n

Net purchases for the period are:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) $10,600. \u00a0<\/p>\n

\u00a0B) $9,600.\u00a0<\/p>\n

\u00a0C) $12,600.\u00a0<\/p>\n

\u00a0D) $14,000.\u00a0<\/p>\n

\u00a0<\/p>\n

5. A characteristic of Purchases Returns and Allowances is:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) it has a normal credit balance.\u00a0<\/p>\n

\u00a0B) it increases when merchandise is returned.\u00a0<\/p>\n

\u00a0C) it decreases cost.\u00a0<\/p>\n

\u00a0D) All of these are correct.\u00a0<\/p>\n

\u00a0<\/p>\n

6. Clothes’ R Us bought some new clothes for its fashion line and is required to pay the freight costs. The freight terms are:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) F.O.B. destination.\u00a0<\/p>\n

\u00a0B) F.O.B. shipping point. \u00a0<\/p>\n

\u00a0C) 2\/10, n\/30.\u00a0<\/p>\n

\u00a0D) None of these are correct.\u00a0<\/p>\n

\u00a0<\/p>\n

7. When the term F.O.B. shipping point is used, title passes:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) when goods reach the halfway point.\u00a0<\/p>\n

\u00a0B) when goods reach the destination.\u00a0<\/p>\n

\u00a0C) when goods are shipped. \u00a0<\/p>\n

\u00a0D) when the buyer unpacks the goods.\u00a0<\/p>\n

\u00a0<\/p>\n

8. On November 30, Janoch’s Dog Kennel purchased $500 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Ganster Company and added to the invoice. The amount to record in the Purchases account is:<\/p>\n

\u00a0<\/p>\n

\u00a0A) $500.\u00a0<\/p>\n

\u00a0B) $540.\u00a0<\/p>\n

\u00a0C) $520.\u00a0<\/p>\n

\u00a0D) $550.\u00a0<\/p>\n

\u00a0<\/p>\n

9. The entry to record a purchase of $2,000 on account, terms of 2\/10, n\/30, would include a:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) debit to Purchases Discount for $40.\u00a0<\/p>\n

\u00a0B) credit to Accounts Payable for $2,000.\u00a0<\/p>\n

\u00a0C) debit to Accounts Payable for $2,000.\u00a0<\/p>\n

\u00a0D) credit to Cash for $2,000.\u00a0<\/p>\n

\u00a0<\/p>\n

10. Purchased office supplies on account. This will be recorded with:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) a debit to Accounts Payable and a credit to Supplies.\u00a0<\/p>\n

\u00a0B) a debit to Supplies and a credit to Supplies Expense.\u00a0<\/p>\n

\u00a0C) a debit to Supplies and a credit to Accounts Payable.\u00a0<\/p>\n

\u00a0D) a credit to Supplies and a debit to Purchases.\u00a0<\/p>\n

\u00a0<\/p>\n

11. Heidi’s Accessories bought 40 necklaces for $10 each on account. 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 purchase would include:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) a debit to Accounts Payable for $424.00.\u00a0<\/p>\n

\u00a0B) a debit to Accounts Payable for $400.00.\u00a0<\/p>\n

\u00a0C) a debit to Purchases for $424.00.\u00a0<\/p>\n

\u00a0D) a debit to Purchases for $400.00. \u00a0 \u00a0<\/p>\n

\u00a0<\/p>\n

12. On February 12, Clare purchased $350 of merchandise on account from Larsen’s Accessories, terms 2\/10, n\/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) $343.\u00a0<\/p>\n

\u00a0B) $383.\u00a0<\/p>\n

\u00a0C) $350. \u00a0 \u00a0<\/p>\n

\u00a0D) $390.\u00a0<\/p>\n

\u00a0<\/p>\n

13. A debit memorandum decreases which account on the buyer’s books?\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) Accounts Payable \u00a0 \u00a0\u00a0<\/p>\n

\u00a0B) Purchases Returns and Allowances\u00a0<\/p>\n

\u00a0C) Sales Returns and Allowances\u00a0<\/p>\n

\u00a0D) Accounts Receivable\u00a0<\/p>\n

\u00a0<\/p>\n

14. The entry to record returned merchandise to Vans Company is:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) debit Purchases Returns and Allowances; credit Accounts Payable in the general ledger.\u00a0<\/p>\n

\u00a0B) debit Accounts Payable; credit Purchases.\u00a0<\/p>\n

\u00a0C) debit Accounts Payable\/Vans Company in the accounts payable subsidiary ledger and debit Accounts Payable in the general ledger; credit Purchases Returns and Allowances.\u00a0<\/p>\n

\u00a0D) debit Purchases; credit Accounts Payable.\u00a0<\/p>\n

\u00a0<\/p>\n

15. Heidi’s Accessories bought 40 necklaces for $10 each on account. 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:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) a debit to Accounts Payable for $50.00.\u00a0<\/p>\n

\u00a0B) a debit to Accounts Payable for $53.00. \u00a0 \u00a0\u00a0<\/p>\n

\u00a0C) a debit to Purchases Returns and Allowances for $50.00.\u00a0<\/p>\n

\u00a0D) a debit to Purchases Returns and Allowances for $53.00.\u00a0<\/p>\n

\u00a0<\/p>\n

16. Jackson purchased $400 of goods and received credit terms of 2\/10, n\/30. How much did he pay if payment was made during the discount period?\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) $360\u00a0<\/p>\n

\u00a0B) $408\u00a0<\/p>\n

\u00a0C) $400\u00a0<\/p>\n

\u00a0D) $392 \u00a0 \u00a0<\/p>\n

\u00a0<\/p>\n

17. Medeco bought goods for $150 on credit. Medeco returned $50 worth of goods. Terms of the sale were 2\/10, n\/30. If Medeco pays the amount owed within the discount period, what is the amount they should pay?\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) $97\u00a0<\/p>\n

\u00a0B) $147\u00a0<\/p>\n

\u00a0C) $98 \u00a0 \u00a0<\/p>\n

\u00a0D) $148\u00a0<\/p>\n

\u00a0<\/p>\n

18. Using the perpetual inventory system, the purchase of merchandise on account would include a:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) debit to Merchandise Inventory and a credit to Accounts Payable.\u00a0<\/p>\n

\u00a0B) debit to Accounts Payable and a credit to Merchandise Inventory.\u00a0<\/p>\n

\u00a0C) debit to Accounts Receivable and a credit to Sales.\u00a0<\/p>\n

\u00a0D) debit to Sales and a credit to Accounts Receivable.\u00a0<\/p>\n

\u00a0<\/p>\n

19. The return of merchandise to the supplier for credit using the perpetual inventory system would include a:\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0A) debit to Accounts Receivable and a credit to Accounts Payable.\u00a0<\/p>\n

\u00a0B) debit to Accounts Payable and a credit to Merchandise Inventory.\u00a0<\/p>\n

\u00a0C) debit to Merchandise Inventory and a credit to Accounts Payable.\u00a0<\/p>\n

\u00a0D) debit to Accounts Payable and a credit to Purchases Returns and Allowances.\u00a0<\/p>\n

\u00a0<\/p>\n

20. The account used in perpetual inventory to record the cost of inventory used to make the sale is:\u00a0<\/p>\n

\u00a0<\/p>\n

A) Purchases.\u00a0<\/p>\n

B) Purchases Returns and Allowances.\u00a0<\/p>\n

C) Purchases Discounts.\u00a0<\/p>\n

D) Cost of Goods Sold.\u00a0<\/p>\n

\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

1. \u00a0Net purchases are:\u00a0 \u00a0 \u00a0A) Purchases + Purchases Returns and Allowances.\u00a0 \u00a0B) Purchases – Purchases Discount – Purchases Returns and Allowances.\u00a0 \u00a0C) Purchases – Freight – Purchases Returns and Allowances.\u00a0 \u00a0D) Purchases + Freight-In.\u00a0 \u00a0 2. \u00a0Purchases is a(n):\u00a0 \u00a0A) cost.\u00a0 \u00a0B) asset.\u00a0 \u00a0C) liability.\u00a0 \u00a0D) revenue.\u00a0 \u00a0 3. \u00a0A cost account is treated […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-7684","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=7684"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7684\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=7684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=7684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=7684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}