Chapter 8

Question 1

What does a purchase requisition list?

Answer 1

Items to be ordered

Question 2

What is the purpose of a purchase invoice?

Answer 2

This is the bill for purchases ordered.

Question 3

True or false. Purchase is a temporary account classified as a cost of goods sold account?

Answer 3

True. Because the total amount of the item purchased must be figured into the cost of the item in addition to freight costs, etc.

Question 4

The cost of shipping goods from the seller to the buyer is called what?

Answer 4

Freight Charges

Question 5

It is not efficient to enter purchases in the general journal. Where are credit purchases of merchandise recorded?

Answer 5

Purchases journal

Question 6

How do you calculate net purchases?

Answer 6

Accounts Payable CREDIT purchases MINUS freight charges.

Question 7

Purchase returns and allowances are posted to which journal. The general or the purchases journal?

Answer 7

General

Question 8

What do you call a list of all balances owed to creditors?

Answer 8

Schedule of Accounts Payable

Question 9

What are the two kinds of inventory systems?

Answer 9

Perpetual and Periodic