Chapter 3B, Before Moving On - Sage 50

Question 1

When journalizing non-merchandise purchases with HST, how is HST recorded?

Answer 1

HST is recorded to the HST paid on Purchases account and is refundable from the Federal Government.

This would apply to goods or services used by the business.

Question 2

Give the journal entry for a purchase return of $300.00 plus HST of $39.00:

A) for merchandise for resale

B) for merchandise not for resale, plus $39.00 HST (non-purchase items-office supplies.

Answer 2

A) merchandise for resale.
DR Accounts Payable 339.00 CR Inventory 300.00
CR HST on Purchases 39.00
The Purchase Return must be entered in the PAYABLES module as a negative invoice.
B) for merchandise not for resale, plus $39.00 HST (non-purchase items – office supplies).
DR Accounts Payable 339.00
CR Office Supplies 300.00
CR HST on Purchases 39.00

Question 3

Give the journal entry for a prepayment of $100.00 to a vendor.

How is it entered in Sage 50.

Answer 3

DR Accounts Payable 100.00
CR Cash 100.00
The entry is recorded using the Purchase Order option.
The $100.00 is entered in the Prepayment Amount field.

See Exercise 3B-29.

Question 4

Describe briefly how the HST remittance is calculated.

Answer 4

by subtracting the HST Paid on Purchases and Expenses from the HST Collected on Sales in the period of activity, which can be a month or a 3 month period, etc.

HST Collected on Sales - HST Paid on Purchases = Remittance

Question 5

What happens when you post journal transactions in the PAYABLES module?

Answer 5

the vendor records are updated and the General Ledger accounts affected are also updated.

Question 6

When journalizing non-merchandise purchases with HST, what amount is the HST based on?

Answer 6

the selling price of the goods before HST.

Question 7

What would a manager look for when reviewing the cheque log?

Answer 7

A) Look to see the number of times a cheque was printed. Was this the fault of the printer, actual paper cheques, software or various other reasons?

B) Look to see if any cheques were issued to new payees that management was not aware of.

C) In reviewing the report, the manager would want to see the cancelled cheques to verify that all damaged cheques were voided and unusable and to see if any cheque numbers are missing.

D) The report helps management verify cheque withdrawals from the bank account.