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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

True/False Questions


1	The special purchases journal is used to record all transactions in which merchandise or equipment is purchased on credit.
		A)	True
		B)	False


2	When properly designed, a purchases journal makes posting to the general ledger unnecessary.
		A)	True
		B)	False


3	The provision in the purchases journal of special columns for the invoice number, the invoice date, and the credit terms is intended to ensure payment of the bill when it is due.
		A)	True
		B)	False


4	An account called Purchases is charged with the cost of the merchandise as it is sold.
		A)	True
		B)	False


5	One of the basic advantages of the purchases journal is that the posting to Accounts Receivable is simplified.
		A)	True
		B)	False


6	Each purchase of merchandise on credit should be recorded in the purchases journal as it occurs during the month.
		A)	True
		B)	False


7	The balance of each creditor's account in the accounts payable ledger is not computed until the end of the accounting period.
		A)	True
		B)	False


8	At the end of the month, the total of the Accounts Payable column in the purchases journal is debited to the Accounts Payable control account.
		A)	True
		B)	False


9	Payments made to creditors are recorded in the cash payments journal.
		A)	True
		B)	False


10	At the end of the month, the total of the payments made to creditors is debited to the Purchases account.
		A)	True
		B)	False


11	Within the accounts payable ledger, the accounts for creditors are arranged alphabetically or by account number.
		A)	True
		B)	False


12	After all postings for a period are completed, the total of the individual balances in the accounts payable ledger should be equal to the balance of the Accounts Payable control account in the general ledger.
		A)	True
		B)	False


13	As soon as it is recorded in the purchases journal, the amount of a purchase is posted as a credit to the supplier's account in the accounts payable ledger.
		A)	True
		B)	False


14	A payment is first recorded in the cash payments journal and then debited immediately to the supplier's account in the accounts payable ledger.
		A)	True
		B)	False


15	The procedure for posting totals from the purchases journal remains the same, whether or not an accounts payable ledger is used.
		A)	True
		B)	False


16	Freight In becomes part of the cost of purchases shown in the Cost of Goods Sold section of the income statement.
		A)	True
		B)	False


17	A receiving report is prepared to show the quantity of goods received and their condition.
		A)	True
		B)	False

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