201 FS 8 Journal Entries--Balance Sheet--Key

201 FS 8 Journal Entries--Balance Sheet--Key - 201 Journal...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
201 Journal Entries—Balance Sheet 1. A company paid $100,000 of invoices for inventory that was originally purchased on credit. The company paid the invoices in time to take advantage of a 5% early payment discount. The company treats discounts as a reduction in inventory value. How will this transaction be recorded? a. debit inventory $100,000; credit accounts payable $100,000 b. debit cash $95,000; debit inventory $5,000; credit accounts payable $100,000 c. debit accounts payable $100,000; credit inventory $5,000; credit cash $95,000 d. debit accounts payable $95,000; credit cash $95,000 e. none of the above 2. A company paid $100,000 of invoices for inventory that was originally purchased on credit. The company paid the invoices in time to take advantage of a 15% early payment discount. The company treats discounts as a reduction in inventory value. How will this transaction be recorded? a. debit accounts payable $100,000; credit inventory $15,000; credit cash $85,000 b. debit accounts payable $85,000; credit cash $85,000 c. debit inventory $100,000; credit accounts payable $100,000 d. debit cash $85,000; debit inventory $15,000; credit accounts payable $100,000 e. none of the above 3. When a company recorded a transaction it debited an asset and credited a liability. Which of the following explanations best describes the transaction? a. the company purchased inventory on account b. the company paid for inventory previously purchased on account c. the company paid off a debt d. the company issued new stock for cash e. none of the above 4. A company issued 20,000 shares of $1 par value common stock for $100,000. How will this transaction be recorded? a.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/12/2010 for the course ACCY 201 taught by Professor Susancurtis during the Fall '09 term at University of Illinois, Urbana Champaign.

Page1 / 4

201 FS 8 Journal Entries--Balance Sheet--Key - 201 Journal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online