Question

16. Ir goods in transit are shipped FOB destination a the seller has legal title to the goods until they are delivered b. the buyer has legal title to the goods until they are delivered the transportation company has legal title to the goods while the goods are in transit d. no one has legal title to the goods until they are delivered 17.Interest is usually associated with a accounts receivable. b. notes receivable. cdoubtful accounts d. bad debts. 18. The term "receivables" refers to a. amounts due from individuals or companies. b. merchandise to be collected from individuals or companies. c. cash to be paid to creditors. d. cash to be paid to debtors. 19. Which of the following would require a compound journal entry? a. To record merchandise returned that was previously purchased on account b. To record sales on account. c. To record purchases of inventory when a discount is offered for prompt payment. d. To record collection of accounts receivable when a cash discount is taken 20. Under the allowance method, writing off an uncollectible account a. affects only balance sheet accounts. b. affects both balance sheet and income statement accounts. c. affects only income statement accounts. d. is not acceptable practice. 21. Cash McIntyre Company made a purchase of merchandise on credit from Marvin Company on August 8. for $11.000, terms 3/10, n/30. On August 17, McIntyre makes payment to Marvin. The entry on August 17 for McIntyre Company is: a. Accounts Payable 11,000 11,000 b. Accounts Payable. 10,670 10,670 c. Accounts Payable ............... 11,000 Purchase Returns and Allowances..... 330 Cash... 10,670 d. Accounts Payable ... 11,000 Inventory..... 330 Cash 10,670 Cash-

Answer 1

16) Answer is Option a.

If goods are in transit and are shipped to fob destination the seller has the legal title to goods until they are delivered.

17) Answer is Option b.

Interest is usually associated with the notes receivable.

18) Answer is Option a.

Receivables refers to amounts receivable from our customers who may be companies or individuals etc.

19) Answer is Option d.

Compound journal entry is required when the transaction requires to record collection of accounts receivables when a cash discount is taken.

20) Answer is Option a.

Under the allowance method writing off an uncollectible amount affects only balance sheet accounts.

21) Answer is Option d.

Accounts payable acc $11000 -

To Inventory acc - $330

To Cash acc - $10670

Amount has been less paid  because of the terms and conditions as agreed on August 8.

Thank you.