Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
21) A company has four vendors and the accounts payable subsidiary ledger shows the following
balances.
Alpha
$278,821
Beta
157,474
Gamma
83,943
Delta
44,187
Calculate the accounts payable balance in the general ledger.
A) $436,295
B) $564,425
C) $278,821
D) $285,604
22) State the purpose of a subsidiary ledger. What is included in the accounts receivable subsidiary
ledger?
23) Sales on account are recorded in a cash receipts journal.
24) Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the
general ledger.
25) After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the
general ledger should equal the sum of the individual customer balances in the accounts receivable
subsidiary ledger.
26) The sales journal is used for all sales of merchandise inventory.
27) A sales journal is ________.
A) a special journal used to record all the cash sales
B) used to record the sales of assets other than merchandise inventory
C) a special journal used to record credit sales
D) a general journal used to record the adjustments in revenue account
28) Northern Corporation sold goods to Eastern Enterprises for $1,000 on account. Cost of goods sold was
$745. Northern uses a perpetual inventory system and special journals. The cost of goods sold is recorded
in the ________ column of the sales journal.
A) Accounts Receivable DR, Sales Revenue CR
B) Cost of Goods Sold CR, Merchandise Inventory DR
C) Cost of Goods Sold DR, Merchandise Inventory CR
D) Sales Revenue DR, Accounts Receivable CR
29) Southeastern Corporation sold merchandise for $4,450 to Northern, Inc. on account. The cost of goods
sold was $1,185. Southeastern Corporation uses a perpetual inventory system and special journals. The
$4,450 is recorded as ________.
A) an entry in the general journal
B) Accounts Receivable DR, Sales Revenue CR column of the sales journal
C) Merchandise Inventory DR column of the purchases journal
D) Accounts Receivable CR column of cash receipts journal
30) Triangle Corporation sold a product on credit for $2,235 to Hexagon Sales. The cost of goods sold was
$1,324. Assuming Triangle is following a perpetual inventory system and using a sales journal, it will
record $2,235 in the ________.
A) Accounts Receivable CR, Sales Revenue DR column
B) Cost of Goods Sold DR, Merchandise Inventory CR column
C) Merchandise Inventory DR, Cost of Goods Sold CR column
D) Accounts Receivable DR, Sales Revenue CR column
31) California Corporation sold a product for $7,150 to Alliance Enterprises on credit. The cost of goods
sold is $5,650. Assuming the firm is following a perpetual inventory system and using a sales journal, it
will record $5,650 in the ________.
A) Accounts Receivable DR, Sales Revenue CR column
B) Cost of Goods Sold DR, Merchandise Inventory CR column
C) Merchandise Inventory DR, Cost of Goods Sold CR column
D) Sales Revenue DR, Accounts Receivable CR column
32) Which of the following is true of a sales journal prepared under the perpetual inventory system?
A) It includes a Cost of Goods Sold DR, Merchandise Inventory CR column.
B) It records both cash and credit sales transactions.
C) All transactions recorded in a sales journal also are entered in the general journal.
D) It cannot be used with a perpetual inventory system.
33) If a business uses the periodic inventory system, the sales journal will ________.
A) record both the cash and credit sales
B) include a Purchase DR and Account Receivable CR column
C) exclude the Accounts Receivable DR and Sales Revenue CR column
D) exclude the Cost of Goods Sold DR and Merchandise Inventory CR column
34) Which of the following is true of posting from a sales journal to the general ledger?
A) Entries in the sales journal are posted to either the accounts receivable subsidiary ledger or the general
ledger.
B) Individual accounts receivable are posted daily from the sales journal to the accounts receivable
subsidiary ledger.
C) Even though the sales journal is posted monthly to the subsidiary ledger, it is a reliable record of the
amount received from each customer.
D) Under a perpetual inventory system, the sales journal will not have the Cost of Goods Sold DR and
Merchandise Inventory CR column.
35) Ocean Corporation sells a product for $500 on account to Great Atlantic Sales. This transaction will be
recorded in the ________.
A) cash payments journal
B) sales journal
C) cash receipts journal
D) purchase journal
36) Gold Corporation had the following transactions:
Jun. 4
Sold merchandise inventory on account to Sarah Pardee, $1,210. Cost of goods, $920.
Invoice no. 101.
10
Sold merchandise inventory on account to Sean Lewis, $2,100. Cost of goods, $1,660.
Invoice no. 102.
12
Sold merchandise inventory on account to Ellie Robins, $400. Cost of goods, $230.
Invoice no. 103.
26
Sold merchandise inventory on account to Diana Rees, $870. Cost of goods, $630.
Invoice no. 104.
Use the following sales journal to record the preceding transactions. The company uses the perpetual
inventory system.
Sales Journal
Page 1
Date
Invoice
No.
Customer
Account
Debited
Post
Ref.
Accounts Receivable DR
Sales Revenue CR
Cost of Goods Sold DR
Merchandise Inventory
CR
37) The cash receipts journal is a special journal used to record business transactions involving cash
receipts and credit sales.
38) In the cash receipts journal, the Other Accounts CR column is used when a transaction involves a
credit entry that is not listed in the headings (columns) of the cash receipts journal.
39) Unlike the sales journal, entries in the cash receipts journal are posted monthly to the accounts
receivable subsidiary ledger and daily to the general ledger.
40) Midwest Enterprises uses special journals. The company borrowed $10,000 from First State Bank.
This transaction is recorded in the ________.
A) general journal
B) debt journal
C) cash receipts journal
D) cash payments journal
41) The sale of merchandise inventory for cash is recorded in the ________.
A) general journal
B) cash receipts journal
C) sales journal
D) accounts receivable journal
42) In a cash receipts journal, ________.
A) cash sales are recorded in the Accounts Receivable CR column and the Cash DR column
B) collections on account are recorded in the Accounts Receivable DR column and the Cash DR column
C) the miscellaneous cash receipt transactions are ignored
D) the cash sales are recorded in the Sales Revenue CR column
43) In a perpetual inventory system, when cash sales are recorded, ________.
A) merchandise inventory decreases and cost of goods sold decreases
B) sales revenue increases and cash decreases
C) sales revenue increases and cost of goods sold decreases
D) merchandise inventory decreases and cost of goods sold increases
44) Which of the following is not typically shown as a separate column in a cash receipts journal that uses
the perpetual inventory system?
A) Interest Revenue CR column
B) Cost of Goods Sold DR, Merchandise Inventory CR column
C) Sales Revenue CR column
D) Sales Discounts Forfeited CR column
45) Which of the following will be recorded in the Other Accounts CR column of the cash receipts
journal?
A) cash sales
B) receipt of interest revenue
C) receipt of accounts receivable
D) sales discounts forfeited
46) A CR.5 posting reference in a subsidiary ledger signifies that the ________.
A) posting is transferred from the cash receipts journal, page 5
B) transaction on page number 5 is credited
C) amount credited is after a 5% discount
D) sales on credit is expected to be paid within five days
47) Every transaction recorded in the cash receipts journal includes a ________.
A) credit to Cash
B) debit to Accounts Receivable
C) credit to Accounts Receivable
D) debit to Cash
48) Australia Corporation sells a product for $500 cash to Martin and Lewis Enterprises. This transaction
will be recorded in the ________.
A) cash payments journal
B) sales journal
C) cash receipts journal
D) purchase journal
