Question :
131. When goods shipped FOB destination and the seller pays the : 1234066
131. When goods are shipped FOB destination and the seller pays the transportation charges, the buyer
A. journalizes a reduction for the cost of the merchandise.
B. journalizes a reimbursement to the seller.
C. does not take a discount.
D. makes no journal entry for the transportation.
132. Black Company sold Red Company merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Black prepaid the $200 shipping charge. Which of the following entries does Black make to record this sale?
A. Accounts Receivable-Red, debit $10,000; Sales, credit $10,000
B. Accounts Receivable-Red, debit $10,000; Sales, credit $10,000, and
Accounts Receivable-Red, debit $200; Cash, credit $200
C. Accounts Receivable-Red, debit $10,400; Sales, credit $10,400
D. Accounts Receivable-Red, debit $10,000; Sales, credit $10,000, and
Transportation Out, debit $200; Cash, credit $200
133. Orange Co. sold Red Co. merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Orange Co. prepaid the $200 shipping charge. Using the perpetual inventory system, which of the following entries will Red Co. make if Red Co. pays within the discount period?
A. Accounts Payable-Orange Co., debit $10,000; Transportation In, credit $200; Cash, credit $9,800
B. Accounts Payable-Orange Co., debit $10,200; Merchandise Inventory, credit $200; Cash, credit $10,000
C. Accounts Payable-Orange Co., debit $10,000; Transportation In, debit $200; Cash, credit $10,200
D. Accounts Payable-Orange Co., debit $10,200; Merchandise Inventory, debit $200; Cash, credit $10,400
134. A chart of accounts for a merchandising business usually
A. is the same as the chart of accounts for a service business
B. requires more accounts than does the chart of accounts for a service business
C. is standardized by the FASB for all merchandising businesses
D. does not have a Cost of Merchandise Sold account if a perpetual inventory system is used
135. Robles Co. sells $1,000 of inventory to Salas Co.for cash. Robles paid $650 for the merchandise. Under a perpetual inventory system, the following journal entry(ies) would be recorded.
A. Cash 1,000 Dr, Merchandise Inventory 650 Cr
B. Cash 1,000 Dr, Sales 1,000 Cr, Cost of Merchandise Sold 650 Dr, Merchandise Inventory 650 Cr.
C. Cash 1,000 Dr, Sales 1,000 Cr
D. Accounts Receivable 1,000 Dr, Sales 1,000 Cr, Cost of Merchandise Sold 650 Dr, Merchandise Inventory 650 Cr.
136. Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
A. $160, September 30
B. $160, September 25
C. $80, September 30
D. $80, September 25
137. Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. If Zea Co. chooses not to take the discount, by when should the payment be made?
A. September 30
B. October 30
C. October 15
D. September 25
138. Discounts taken by a buyer because of early payment are recorded on the seller’s accounting records as
A. Purchases discount
B. Sales discount
C. Trade discount
D. Early payment discount
139. Taking advantage of a 2/10, n/30 purchases discount is equal to a savings yearly rate of approximately
A. 2%
B. 24%
C. 20%
D. 36%
140. Based on the following information, what would be recorded as purchases discount if the invoice is paid within the discount period?
1.
$5,000 of merchandise inventory was ordered on April 2, 2007
2.
$2,000 of this merchandise was received on April 5, 2007
3.
On April 6, 2007, an invoice dated April 4, 2007, with terms of 2/10, net 30 for $2,150 which included a $150 prepaid freight cost, was received.
4.
On April 10, 2007, $500 of the merchandise was returned to the seller.
A. $100
B. $30
C. $43
D. $33
