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Recording cash received using a cash receipts journal when PST, GST, or HST is included.

Recording cash received using a cash receipts journal when PST, GST, or HST is included.

 Recording cash received using a cash receipts journal when PST, GST, or HST is included.

 

1) Bruce's Jewelry bought 50 rings for $10 each on account. The invoice included 13% HST and payment terms of 2/10, n/30. In addition, five rings were later returned prior to payment. The entry to record the purchase would include

A) a debit to Accounts Payable for $500.00.

B) a debit to Accounts Payable for $565.00.

C) a debit to Purchases for $500.00.

D) a debit to Purchases for $565.00.

 

2) What type of account is Purchases?

A) Contra revenue

B) Revenue

C) Contra expense

D) Cost

3) When the term F.O.B. shipping point is used, title passes

A) when HST is fully paid.

B) when goods reach the destination.

C) when goods are shipped.

D) when the goods are unpacked by the buyer.

 

4) The credit that a company receives for the GST/HST it pays is called

A) Output Tax Credit.

B) Input Tax Credit.

C) Business Tax Credit.

D) Payroll Tax Credit.

 

5) On March 30, Francine's Bakery purchased $1,000, plus 13% HST, of merchandise on account from Smithers Company. The goods were shipped F.O.B. shipping point. The freight charge of $80 (includes HST) was paid by Williams Company and added to the invoice. The amount to record in the Accounts Payable account is

A) $1,000.

B) $1,300.

C) $1,210.

D) $1,130.

 

6) The Purchases Discounts account normally has a debit balance and is a Contra Cost account.

 

10.6   Recording cash paid out in the cash payments journal when GST or HST is included.

 

1) A debit memorandum decreases which account on the buyer's books?

A) Accounts Payable

B) Purchases Returns and Allowances

C) Sales Returns and Allowances

D) Accounts Receivable

2) The normal balance for Purchases Returns and Allowances is

A) a debit.

B) a credit.

C) zero.

D) It does not have a normal balance.

 

3) Heidi's Accessories bought 40 necklaces for $10 each on account. The invoice included 5% GST and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include

A) a debit to Accounts Payable for $50.00.

B) a debit to Accounts Payable for $52.50.

C) a debit to Purchases Returns and Allowances for $50.00.

D) a debit to Purchases Returns and Allowances for $52.50.

 

4) What type of account is Purchases Returns and Allowances?

A) Liability

B) Contra asset

C) Contra cost/expense

D) Contra revenue

 

 

 

5) If Rosie sends back damaged merchandise for credit, it would be a

A) Sales Return and Allowance.

B) Sales Discount.

C) Purchases Returns and Allowance/Discount.

D) Purchases Discount.

Tripti 06-Dec-2019

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