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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

Accounting for Merchandise Purchases, Accounts Payable, and Cash Payments

Multiple Choice Questions


1	Which journal are the purchases of merchandise recorded in?
		A)	Special journal
		B)	Purchases journal
		C)	Merchandise journal
		D)	Subsidiary journal


2	Which is not a subsidiary ledger?
		A)	Accounts payable
		B)	Accounts receivable
		C)	Customers
		D)	Cash


3	A list sent to the purchasing department showing goods to be ordered is called?
		A)	Purchase order
		B)	Purchase invoice
		C)	Purchase requisition
		D)	Order form


4	Which is not a type of basic business?
		A)	Government
		B)	Service
		C)	Manufacturing
		D)	Merchandise


5	In which account are purchases entered when using a perpetual inventory system?
		A)	Purchases
		B)	Supplies
		C)	Accounts payable
		D)	Merchandise Inventory


6	When a business's GST input tax credit is larger than the GST collected from sales, which is true?
		A)	The business pays all GST the it has paid to suppliers to the government
		B)	Nothing happens, as the business keeps all money that it has collected
		C)	The business will have to pay all of the GST collected to the Government
		D)	The business will receive a GST refund in the amount of the difference between GST collected and GST paid out


7	A cash discount offered to customers buying goods for payment within a specified period is called?
		A)	Purchase discount
		B)	Sales discount
		C)	Cash discount
		D)	Sales invoice


8	An invoice totaling $ 1500.00 2/10, net 30 that was paid within the 10 day discount period would save how many dollars?
		A)	$ 30.00
		B)	$ 1350.00
		C)	$ 0.00
		D)	$ 150.00


9	Which is not true regarding the functions of a purchasing department?
		A)	Locating suitable suppliers
		B)	Obtaining price quotations
		C)	Paying the suppliers
		D)	Placing orders with suppliers


10	Purchase returns and allowances are?
		A)	Debit Merchandise Inventory
		B)	Credit Merchandise Inventory
		C)	Debit to Purchase returns and allowances
		D)	Credit Cash

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