Question 1

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used.
Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc.
Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$.
Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co.
Nov. 10 Paid the amount due to Bartkowski Inc.
Nov. 12 Paid the amount due to Thiesman and Co.
Nov. 23 Paid the amount due to Montana Supply Co.
-Journalize the Nov.7 transaction.

Accepted Answer

The answer of Journalize the following transactions. All purchases are...

Question 2

Determine the amount to be paid within the discount period for purchase with an invoice price of $10,000,subject to credit terms of 2/10,n/30.
$ ________

Accepted Answer

The answer of Determine the amount to be paid within...

Question 3

Determine the amount to be paid to the vendor within the discount period for purchase with an invoice price of $3,000 and credit terms of 2/10,n/30 when $700 has already been returned for credit.The goods were purchased with freight terms of F.O.B shipping point and freight of $50 was included on the invoice.
$ ________

Accepted Answer

The answer of Determine the amount to be paid to...

Question 4

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used.
Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc.
Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$.
Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co.
Nov. 10 Paid the amount due to Bartkowski Inc.
Nov. 12 Paid the amount due to Thiesman and Co.
Nov. 23 Paid the amount due to Montana Supply Co.
-Journalize the Nov.10 transaction.

Accepted Answer

The answer of Journalize the following transactions. All purchases are...

Question 5

The entry to record a payment on a $600 account within the 2% discount period would include a:

Accepted Answer

A payment within the discount period typically involves paying the net amount after taking the discount. However, the entry to record the payment must reflect the full amount of the payable being settled. Therefore, a debit to Accounts Payable for the full amount of $600 is correct, as it indicates the total obligation being removed from the books. The discount would be accounted for separately, typically through a credit to a discounts account or directly reducing the expense or inventory account associated with the purchase.

Question 6

Determine the amount to be paid within the discount period for purchase with an invoice price of $5,000 and credit terms of 2/10,n/30 when $500 has already been returned for credit.
$ ________

Accepted Answer

The answer of Determine the amount to be paid within...

Question 7

The buyer issues a debit memorandum to indicate that a previous purchase amount is being reduced because goods were returned or an allowance was requested.

Accepted Answer

A debit memorandum is used to indicate a reduction in a previous purchase amount due to returned goods or a requested allowance.

Question 8

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10,n/30 when full payment was made within the discount period.
$ ________

Accepted Answer

The answer of Determine the amount of credit to be...

Question 9

Jackson purchased $500 of goods and received credit terms of 2/10,n/30.How much did he pay if payment was made during the discount period?

Accepted Answer

Jackson received a 2% discount for paying within 10 days, so he paid 98% of $500, which is $490.

Question 10

Medeco bought goods for $250 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?

Accepted Answer

Medeco bought goods worth $250 and returned $50 worth of goods, so the net amount they owe is $200. They have a 2% discount if they pay within 10 days, which means they can deduct $4 (2% of $200) from the amount owed. Therefore, the amount they should pay within the discount period is $196.

Question 11

Heidi's Accessories bought 50 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 payment (within the discount period)would include:

Accepted Answer

The total cost of the 50 necklaces would be 50*$10 = $500. However, since there is a 6% sales tax included, the total cost becomes $530. 
If 5 necklaces are returned prior to payment, that means $50 is deducted from the total cost, making it $480. 
The payment terms are 2/10,n/30, which means that there is a 2% discount available if the payment is made within 10 days, otherwise the full amount is due within 30 days. 
If the payment is made within 10 days, the discount would be $480*2% = $9.60. 
Therefore, the amount to be paid would be $480-$9.60 = $470.40. 
This means that the credit to Cash would be for $470.40, which is option B.

Question 12

Determine the total cost of a purchase paid for within the discount period with an invoice price of $7,000 and credit terms of 2/10,n/30 when $1,500 has already been returned for credit.The goods were purchased with freight terms of F.O.B shipping point and freight of $50.
$ ________

Accepted Answer

The answer of Determine the total cost of a purchase...

Question 13

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used.
Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc.
Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$.
Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co.
Nov. 10 Paid the amount due to Bartkowski Inc.
Nov. 12 Paid the amount due to Thiesman and Co.
Nov. 23 Paid the amount due to Montana Supply Co.
-Journalize the Nov.3 transaction.

Accepted Answer

The answer of Journalize the following transactions. All purchases are...

Question 14

Journalize the following transactions. All purchases are on account and subject to terms of 2/10, n/30. The periodic inventory method is used.
Nov. 3 Purchased merchandise with a price of $\$ 2,000$ from the Bartkowski Inc.
Nov. 5 Purchased merchandise from the Thiesman and Co. with a price of $\$ 4,000$.
Nov. 7 Purchased merchandise with a price of $\$ 2,000$ from the Montana Supply Co.
Nov. 10 Paid the amount due to Bartkowski Inc.
Nov. 12 Paid the amount due to Thiesman and Co.
Nov. 23 Paid the amount due to Montana Supply Co.
-Journalize the Nov.5 transaction.

Accepted Answer

The answer of Journalize the following transactions. All purchases are...

Question 15

Returned merchandise under the periodic inventory method.This will be recorded with:

Accepted Answer

Under the periodic inventory method, returned merchandise is recorded by debiting Accounts Payable (to decrease the liability owed to the supplier due to the return) and crediting Purchases Returns and Allowances (to decrease the total purchases amount).

Question 16

Returned merchandise paid for within the discount period for a Cash refund.This will be recorded with:

Accepted Answer

When returned merchandise is paid for within the discount period, a cash refund is given, which means there is an increase in the asset (Cash) and a decrease in the asset (Merchandise Inventory) through a debit entry. Therefore, the entry would be a debit to Merchandise Inventory (an asset account) and a credit to Cash (also an asset account).

Question 17

Heidi's Accessories bought 50 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:

Accepted Answer

DThe correct entries to record the return of the necklaces would involve reducing the amount owed to the supplier (Accounts Payable) by the total cost of the returned necklaces including the sales tax. The original purchase was for 50 necklaces at $10 each, totaling $500. The 6% sales tax on $500 is $30, making the total amount $530. If 5 necklaces are returned, the cost of these necklaces is 5 * $10 = $50. The sales tax on this $50 is 6%, which is $3. Therefore, the total amount for the return is $53. This amount should be debited to Accounts Payable to reduce the liability and debited to Purchases Returns and Allowances to record the return of goods, reflecting both the cost of the goods and the tax paid on them.

Question 18

On June 15,Paradise Park purchased merchandise for the race track..The invoice was for $4,500,terms 2/10,n/30.On June 20,Paradise Park returned $200 of merchandise for credit.On June 25,it paid the amount owed.Fill in the blanks below.
a)The debit to Purchases on June 15 is ________.
b)The credit to Accounts Payable on June 15 is ________.
c)The credit to Purchases Returns and Allowances on June 20 is ________.
d)The credit to Cash on June 25 is ________.
e)The credit to Purchases Discount on June 25 is ________.

Accepted Answer

The answer of On June 15,Paradise Park purchased merchandise for...

Question 19

Individual amounts are recorded during the month to the accounts payable ledger.

Accepted Answer

Individual amounts are recorded to the accounts payable ledger as invoices are received and processed throughout the month.

Question 20

If a debit memorandum is issued,the buyer will reduce their accounts receivable.

Accepted Answer

A debit memorandum issued by a buyer typically indicates a reduction in the amount owed to a seller, affecting accounts payable, not accounts receivable.

Quiz 10: Purchases and Cash Payments

Determine the amount to be paid within the discount period for purchase with an invoice price of $10,000,subject to credit terms of 2/10,n/30. $ ________

The entry to record a payment on a $600 account within the 2% discount period would include a:

Determine the amount to be paid within the discount period for purchase with an invoice price of $5,000 and credit terms of 2/10,n/30 when $500 has already been returned for credit. $ ________

The buyer issues a debit memorandum to indicate that a previous purchase amount is being reduced because goods were returned or an allowance was requested.

Determine the amount of credit to be earned on a full return of merchandise purchased with an invoice price of $5,000 and credit terms of 2/10,n/30 when full payment was made within the discount period. $ ________

Jackson purchased $500 of goods and received credit terms of 2/10,n/30.How much did he pay if payment was made during the discount period?

Medeco bought goods for $250 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?

Heidi's Accessories bought 50 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 payment (within the discount period) would include:

Determine the total cost of a purchase paid for within the discount period with an invoice price of $7,000 and credit terms of 2/10,n/30 when $1,500 has already been returned for credit.The goods were purchased with freight terms of F.O.B shipping point and freight of $50. $ ________

Returned merchandise under the periodic inventory method.This will be recorded with:

Returned merchandise paid for within the discount period for a Cash refund.This will be recorded with:

Heidi's Accessories bought 50 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:

Individual amounts are recorded during the month to the accounts payable ledger.

If a debit memorandum is issued,the buyer will reduce their accounts receivable.