Question : 91. A company purchased $7,500 worth of merchandise. Transportation costs were : 1256831

 

 

91. A company purchased $7,500 worth of merchandise. Transportation costs were an additional $80. The company later returned $900 worth of merchandise and paid the invoice within the 3% cash discount period. The total amount paid for this merchandise is: 

A. $6,479.60

B. $6,482.00

C. $7,275.00

D. $7,355.00

E. $6,680.00

 

 

 

92. A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company later returned $275 worth of merchandise and paid the invoice within the 2% cash discount period. The total amount paid for this merchandise is: 

A. $3,725.00

B. $3,925.00

C. $3,995.00

D. $4,000.50

E. $4,075.00

 

 

93. A company purchased $1,500 of merchandise on credit with terms 3/15, n/30. How much will be debited to Accounts Payable if the company pays $485 cash on this account within 10days? 

A. $485

B. $500

C. Nothing will be debited to Accounts Payable; the account should be credited in this situation.

D. $470.45

E. $1,455

 

 

94. A company purchased $6,000 of merchandise on credit with terms 4/15, n/30. How much will be debited to Accounts Payable if the company pays $800 cash on this account within 10days? 

A. $833.33

B. $800

C. Nothing will debited to Accounts Payable; the account should be credited in this situation.

D. $5,760

E. $5,333.33

 

 

95. Sales returns: 

A. Refer to merchandise that customers return to the seller after the sale.

B. Refer to reductions in the selling price of merchandise sold to customers.

C. Represent cash discounts.

D. Represent trade discounts.

E. Are not recorded under the perpetual inventory system until the end of each accounting period.

 

 

96. A debit to Sales Returns and Allowances and a credit to Accounts Receivable: 

A. Reflects an increase in amount due from a customer.

B. Recognizes that a customer returned merchandise and/or received an allowance.

C. Requires a debit memorandum to recognize the customer’s return.

D. Is recorded when a customer takes a discount.

E. Reflects an increase in net sales.

 

 

97. Sales less sales discounts less sales returns and allowances equals: 

A. Net purchases.

B. Cost of goods sold.

C. Net sales.

D. Gross profit.

E. Net income.

 

 

98. Herald Company had sales of $135,000, sales discounts of $2,000 and sales returns of $3,200. Herald Company’s net sales equals: 

A. $5,200

B. $129,800

C. $133,000

D. $135,000

E. $140,200

 

 

99. On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. The journal entry or entries that Robertson will make on October 1 is:

A.

Sales

5,800

 

Accounts Receivable

 

5,800

 

B.

Sales

5,800

 

Accounts Receivable

 

5,800

Cost of Goods Sold

4,000

 

Merchandise Inventory

 

4,000

 

C.

Accounts Receivable

5,800

 

Sales

 

5,800

 

D.

Accounts Receivable

5,800

 

Sales

 

5,800

Cost of Goods Sold

4,000

 

Merchandise Inventory

 

4,000

 

E.

Accounts receivable

4,000

 

Sales

 

4,000

 

 

 

100. On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. Alberts pays the invoice on October 8 and takes the appropriate discount. The journal entry that Robertson makes on October 8 is:

 

A.

Cash

5,800

 

Accounts Receivable

 

5,800

 

B.

Cash

4,000

 

Accounts Receivable

 

4,000

 

C.

Cash

3,920

 

Sales Discounts

80

 

Accounts Receivable

 

4,000

 

D.

Cash

5,684

 

Accounts receivable

 

5,684

 

E.

Cash

5,684

 

Sales Discounts

116

 

Accounts Receivable

 

5,800