31) A form used in business to place an order for the buying of goods from a seller is:

A) purchase requisition.

B) purchase order.

C) purchase demand.

D) purchases returns.

32) A purchase discount correctly taken was debited to Purchases at the time the entry was recorded. This error will cause:

A) net income to be overstated.

B) net income to be understated.

C) net income to not be affected.

D) total assets to be overstated.

33) The freight paid on goods purchased F.O.B. Shipping Point was not recorded. This error will cause:

A) net income to be overstated.

B) net income to be understated.

C) net income to not be affected.

D) total liabilities to be overstated.

34) Purchased office supplies on account. This will be recorded with:

A) a debit to Accounts Payable and a credit to Supplies.

B) a debit to Supplies and a credit to Supplies Expense.

C) a debit to Supplies and a credit to Accounts Payable.

D) a debit to Supplies and a credit to Purchases.

35) A characteristic of Purchases is:

A) it has a debit normal balance.

B) it increases net income.

C) that it is used to record the purchase of merchandise to be resold.

D) A and C are correct.

36) Which of the following transactions will cause one asset to be debited and another to be credited when the periodic inventory system is in use?

A) Purchased merchandise on account

B) Purchased merchandise for cash

C) Purchased office supplies for cash

D) Returned merchandise inventory for credit

37) Which of the following transactions will cause a liability to be credited and a cost account to be debited when the periodic inventory system is in use?

A) Recorded the adjustment for depreciation

B) Recorded the adjustment for the consumption of supplies

C) Purchased merchandise inventory on account

D) Purchased office supplies on account

38) Purchases:

A) decrease net income.

B) increase net income.

C) have no effect on net income.

D) increase capital.

39) Purchases discounts:

A) decrease net income.

B) increase net income.

C) increase accounts payable.

D) Not enough information provided.

40) Purchases Returns and Allowances:

A) decrease net income.

B) increase net income.

C) increase accounts payable.

D) Not enough information provided.

 

 



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