4. Divide into groups of four individuals. Your company is named Cole’s Cooking Supplies. Assign one person as Cole’s sales associate; one as the company’s A/R clerk; one as the customer Louisa’s Cooking School; and one as Louisa’s A/P clerk. Record the transaction each individual would record from a sale of $50,000 for cooking supplies

!~!~!~!1. What is the name of the account used to record purchases of merchandise inventory?

a. Freight In

b. Purchases Returns and Allowances

c. Purchases

d. Sales !~!~!~!2. Which of the following best describes the Purchases Returns and Allowances account?

a. a contra expense account with a normal debit balance

b. a contra expense account with a normal credit balance

c. a contra revenue account with a normal debit balance

d. a contra revenue account with a normal credit balance !~!~!~!3. Provisions Grocery Store purchased merchandise on account from Federal Grocers for $500.00 on April 6, terms 2/10, n/30. Federal Grocers prepaid freight charges of $25.00 and added them to the invoice. Assuming Provisions Grocery Store pays the amount due within the discount period, what is the amount of the payment?

a. $515.00

b. $514.50

c. $525.00

d. $535.00 !~!~!~!4. What form is sent to the supplier to order goods?

a. purchase invoice

b. purchase order

c. purchase requisition

d. sales invoice

!~!~!~!5. The customer’s accounting department should compare the purchase invoice from the supplier to:

a. the Purchases account and the sales invoice.

b. the Purchases account and the purchase order.

c. the receiving report and the Purchases account.

d. the receiving report and the purchase order.
!~!~!~!6. Bos Sporting Goods, a retail sportswear company, purchased merchandise of $500 on account from Awesome Sweats, a supplier. Awesome Sweats prepaid freight charges of $50 and added them to the invoice. The journal entry to record the purchase is:

a. debit Purchases, $550; credit Accounts Payable, $550.

b. debit Purchases, $500; debit Freight In, $50; credit Accounts Payable, $550.

c. debit Accounts Payable, $550; credit Purchases, $550.

d. debit Purchases, $500; credit Freight In, $50; credit Accounts Payable, $550.
!~!~!~!7. ROE Company reports purchases of $12,000, freight in of $400, purchases returns and allowances of $800, and purchases discounts of $120. What is the amount of the net delivered cost of purchases?

a. $13,080

b. $13,320

c. $11,480

d. $10,680