12-1

Chapter 12, TEST 12B

Name ______

Date ______

SCORING RECORD

Section / Total Possible / Deductions / Student
Score
A / 30
B / 30
C / 10
D / 30
Total / 100

Section A

DIRECTIONS: Each of the following statements is true or false. Indicate your choice by writing in the Answers column T for a true answer or F for a false answer. (2 points for each correct answer)

For

Answers Scoring

  1. Purchasing procedures and documents vary,

depending on the nature and size of the business. ______

  1. A written order to buy goods from a specific

vendor is called a purchase requisition. ______

  1. Major documents used in the purchasing process

are the purchase requisition, purchase order,

receiving report, and purchase invoice. ______

  1. Special discounts on list prices granted to

customers are known as cash discounts. ______

  1. Discounts from invoice prices, which act as an

inducement for prompt payment of invoices, are

called cash discounts. ______

  1. If the terms of an invoice dated May 5 are 3/10,

n/30, the invoice must be paid on or before May 25

in order to be entitled to a discount. ______

  1. The purchases discounts account is credited for

cash discounts allowed by vendors. ______

  1. FOB destination means that transportation charges

are paid by the buyer. ______

  1. Merchandise inventory at the beginning of the

period plus net purchases minus merchandise inventory

at the end of the period equals the cost of goods

sold for the period. ______

  1. An account number is written in the Post Reference

column of the General Journal to indicate posting

has been done in the Accounts Payable subsidiary

ledger. ______

  1. If a buyer is given an allowance for damaged

merchandise, a credit is made to Purchases. ______

  1. Transportation charges paid to ship purchases

are debited to Freight In. ______

  1. Freight In is subtracted from net purchases to

calculate costs of goods purchased. ______

  1. A receiving report should be compared to the

purchase invoice before the invoice is paid. ______

  1. A schedule of accounts payable is prepared from

the list of accounts in the accounts payable

ledger. ______

Section B

Directions: Complete each of the following statements by writing in the Answers column the letter of the word or words that correctly completes each statement. (3 points each)

For

Answers Scoring

  1. A written order by a buyer for merchandise or

other property specified in a purchase requisition

is known as a: (A) purchase invoice; (B) purchase

order; (C) purchase requisition; (D) receiving

report; (E) sales ticket. ______

  1. Special discounts on list prices granted to

customers are known as: (A) cash discounts;

(B) manufacturers' discount; (C) trade discounts;

(D) customers' discounts; (E) net discounts. ______

  1. If the gross amount of an invoice is $500 and a

trade discount of 30% is allowed. The amount of

trade discount would be: (A) $150; (B) $350;

(C) $650; (D) $500; (E) $15. ______

  1. A discount offered as an inducement for prompt

payment of an invoice is called a(n): (A) trade

discount; (B) invoice discount; (C) early discount;

(D) cash discount; (E) none of these. ______

  1. A purchase of goods is made with a list price of

$910 and a trade discount of 10% and credit terms

3/10, n/30. If the invoice is not paid within the

discount period, the amount that would be paid

would be: (A) $819.00; (B) $882.70; (C) $784.43;

(D) $910.00; (E) $937.30. ______

  1. The following indicates that a shipment is free

on board at the destination of the shipment and

the seller will pay the transportation costs:

(A)COD; (B) FOB shipping point; (C) FOB

destination; (D) 3/20, n/30; (E) 2/10, n/30. ______

  1. The cost of merchandise purchased during the

period less any returns or any discounts is

called: (A) purchases; (B) net purchases;

(C)purchases returns and allowances; (D) cost

of goods available; (E) purchase requisition. ______

  1. An invoice of $350.00 dated April 2 is subject to

credit terms of 4/10, n/30. If the invoice is

paid on April 10, the amount to be paid would be:

(A)$14; (B) $332; (C) $350; (D) $364; (E) none

of these. ______

  1. The controlling account for the Accounts Payable

subsidiary ledger is: (A) Purchases; (B) Purchase

Returns & Allowances; (C) Purchase Discounts;

(D) Accounts Payable; (E) Accounts Receivable. ______

  1. A list showing the amount due to each supplier

as of a specified date is known as: (A) schedule

of accounts receivable; (B) trial balance;

(C) schedule of accounts payable; (D) balance

sheet; (E) purchase requisition. ______

Section C

DIRECTIONS: Match the correct answer to the definition that best explains it. (2 points each)

_____ 1. The difference between the goods available for sale and

the ending inventory.

_____ 2. The difference between net sales and cost of goods sold.

_____ 3. Merchandise acquired for resale to customers.

_____ 4. A reduction from the list or catalog price offered to

different classes of customers.

_____ 5. A document prepared by the seller as a bill for the

merchandise shipped.

  1. Gross margin
  2. Purchase invoice
  3. Cost of merchandise sold
  4. Trade discount
  5. Purchases

Section D

DIRECTIONS: Record the following transactions in the general journal. (30 points total)

March 10Purchased merchandise from Able Co. for cash, $1500.

12Purchased merchandise from Delphia Co. listed at $3,000, subject to a trade discount of 15%, for cash.

15Paid freight bill of $400 on Delphia Co. merchandise.

21Purchased merchandise from Green Co., $6000 on account, credit terms 2/10, n/30.

22Returned merchandise to Green Co. worth $500 credit before payment is made.

25 Made payment to Green Co. for balance due less return.