Chapter 9 + 10 Quiz

Question 1

an inventory system that keeps continual track of each type of inventory by recording units on hand at the beginning of each accounting period, units sold, and the current balance after each sale or purchase

Answer 1

Perpetual Inventory System

Question 2

goods bought into a store for resale to customers

Answer 2

merchandise inventory

Question 3

in a perpetual inventory system, an account that records the cost of Merchandise Inventory used to make the sale

Answer 3

Cost of Goods Sold

Question 4

a period shorter than the credit period when a discount is available to encourage early payment of bills

Answer 4

discount period

Question 5

length of time allowed for payment of goods sold on account

Answer 5

sales discount account

Question 6

an account in the general ledger that accumulates the amount of sales tax owed. It has a credit balance

Answer 6

sales tax payable account

Question 7

merchants who buy goods from suppliers and manufacturers for sale to retailers

Answer 7

wholesalers

Question 8

a book or file that contains the individual records, in alphabetical order, of amounts owed by various credit customers

Answer 8

accounts receivable subsidiary ledger

Question 9

a ledger that contains accounts of a single type

Answer 9

subsidiary ledger

Question 10

accounts receivable account in the general ledger shows a firm the total amount of money owed to it by credit customers

Answer 10

controlling account - accounts receivable

Question 11

a bill sent to customer(s) reflecting a credit sale

Answer 11

sales invoice

Question 12

a piece of paper sent by the seller to a customer who has returned merchandise previously purchased on credit

Answer 12

credit memorandum

Question 13

a memo issued by a purchaser to the seller, indicating that some return or allowance has occurred and therefore the purchaser now owes less money on the account

Answer 13

debit memorandum

Question 14

seller pays or is responsible for the cost of freight to purchaser’s location or destination

Answer 14

FOB destination

Question 15

buyer pays or is responsible for the shipping cost from seller’s shipping point to purchaser’s location

Answer 15

FOB shipping point

Question 16

a form used within a business by the requesting department asking the purchasing department of the business to buy specific goods

Answer 16

purchase recognition

Question 17

a form used in business to place an order for the buying of goods from a seller

Answer 17

purchase order

Question 18

the seller’s sale invoice, which is sent to the purchaser

Answer 18

purchase invoice

Question 19

a business form used to notify the appropriate people of the ordered goods received along with the quantities and specific condition of the goods

Answer 19

receiving report

Question 20

used the accounting department in checking the invoice and finally approving it for recording and payment

Answer 20

invoice approval form

Question 21

a book or file that contains, in alphabetic order, the name of the creditor and amount owed from purchases on account

Answer 21

accounts payable subsidiary ledger

Question 22

the account in the general ledger that summarizes or controls a subsidiary ledger

Answer 22

controlling account