Question :
131. If title to merchandise purchases passes to the buyer when : 1239759
131. If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are
A. n/30
B. FOB shipping point
C. FOB destination
D. consigned
132. Merchandise with an invoice price of $3,000 is purchased on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the cost of the merchandise if paid on September 12, assuming the discount is taken?
A. $3,140
B. $3,136
C. $2,744
D. $2,940
133. When goods are shipped FOB destination and the seller pays the freight 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 freight.
134. Anthony Company sold Madison Company merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Anthony prepaid the $300 shipping charge. Which of the following entries does Anthony make to record this sale?
A. Accounts Receivable-Madison, debit $10,000; Sales, credit $10,000
B. Accounts Receivable-Madison, debit $10,000; Sales, credit $10,000, and
Accounts Receivable-Madison, debit $300; Cash, credit $300
C. Accounts Receivable-Madison, debit $10,300; Sales, credit $10,300
D. Accounts Receivable-Madison, debit $10,000; Sales, credit $10,000, and
Freight Out, debit $300; Cash, credit $300
135. Emma Co. sold Isabella Co. merchandise on account FOB shipping point,, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period?
A. Accounts Payable-Emma Co., debit $15,000; Freight In, credit $750; Cash, credit $14,250
B. Accounts Payable-Emma Co., debit $15,750; Merchandise Inventory, credit $300; Cash, credit $15,450
C. Accounts Payable-Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750
D. Accounts Payable-Emma Co., debit $15,750; Merchandise Inventory, debit $300; Cash, credit $16,050
136. A chart of accounts for a merchandising business
A. usually is the same as the chart of accounts for a service business
B. usually requires more accounts than does the chart of accounts for a service business
C. usually is standardized by the FASB for all merchandising businesses
D. always uses a three-digit numbering system
137. Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?
A. Cash $2,000 Dr, Merchandise Inventory $1,250 Cr
B. Cash $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.
C. Cash $1,250 Dr, Sales $1,250 Cr
D. Accounts Receivable $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.
138. Isaac Co. sells merchandise on credit to Sonar Co in the amount of $5,700. The invoice is dated on April 1 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. $114, April 15
B. $114, April 16
C. $57, April 15
D. $57, April 16
139. Isaac Co. sells merchandise on credit to Sonar Co in the amount of $9,600. The invoice is dated on April 15 with terms of 1/15, net 45. If Sonar Co. chooses not to take the discount, by when should the payment be made?
A. April 30
B. May 30
C. May 15
D. April 25
140. 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
