1. To entry to record, a purchase of merchandise on credit using a perpetual inv

Question

1. To entry to record, a purchase of merchandise on credit using a perpetual inventory system includes. A. a debit to merchandise inventory and a credit to Account Payable B. a credit to Merchandise Inventory and a debit to Account Payable. C. a debit to Accounts Payable and a credit to Purchases. D. a debit to Purchases (COGS) and a credit to Accounts Payable
2. A firm appropriately wrote a check for $78 but entered the amount as payment of $87. On a bank reconciliation statement this error would be shown as . A. deduction of $9 from the book balance B. an addition of $9 to the book balance C. a deduction of $9 from the bank statement D. an addition of $9 to the bank statement.
3. When charge customers pay cash to apply against their accounts, the amount is recorded A. on the debit side of cash account and the credit side of the Fees Income account. B. on the debit side of the Accounts Payable account and the credit side of the fees income account. C. on the debit side of the cash account and the credit side of the accounts receivable account. D. on the debit side of the Accounts Receivable account and the credit side of the Cash account.
4. A firm reported sales of $300,000 during the year and has a balance of $20,000 in its Accounts Receivable account at year-end. Prior to adjustment Allowance for Doubtful Accounts has a credit balance of $300. The firm estimated its losses from uncollectible accounts to be one-half of 1 percent of sales. The entry to record the estimated losses from uncollectible accounts will include a credit to Allowance for Doubtful Accounts for?
5. On December 31, prior to adjustments, the balance of Accounts Receivable is $16000 and Allowance for Doubtful Accounts has a credit balance of $95. The firm estimates its losses from uncollectible accounts to be 5% of accounts receivable at the end of the year. The adjusting entry needed to record the estimated losses from uncollectible accounts is made for

Explanation / Answer

1)A. a debit to merchandise inventory and a credit to Account Payable 2)C. a deduction of $9 from the bank statement 3)B. on the debit side of the Accounts Payable account and the credit side of the fees income account

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