Solved by verified expert :16. The collection on account within the 1/10 n/30 discount period was recorded using a 10%discount rather than a 1% discount in both the controlling and subsidiary accounts. This errorwill cause the:a. net income for the period to be understatedb. net income for the period to be overstatedc. control account to not agree with the subsidiary ledgerd. assets to be overstated17. A checkmark in the PR column in the general journal means the:a. entry was recorded correctlyb. amount was posted to the controlling accountc. mount was recorded in the subsidiary ledgerd. entry was audited18. Net purchases are:a. Purchases + Purchases Returns and Allowancesb. Purchases – Purchases Discount – Purchases Returns and Allowancesc. Purchases – Freight – Purchases Returns and Allowancesd. Purchases + Freight-in19. If a display rack was purchased for the store, which of the following accounts would beincreased?a. Store Equipmentb. Purchasesc. Cashd. Capital20. A purchase discount was recorded as a credit to the Purchases account and a debit toAccounts Payable. This error will cause:a. net income to be overstatedb. net income to be understatedc. net income to not be affectedd. total assets to be overstated21. Office Supplies (not used for resale) bought on account were returned for credit and recordedwith a debit to Accounts Payable and a credit to Purchase Returns and Allowances. This errorwill cause:a. net income to be overstatedb. net income to be understatedc. net income to not be affectedd. total assets to be understated22. Returned merchandise paid for within the discount period for cash. The perpetual inventorysystem is in use. This will be recorded with a debit to a(n):a. liability and a credit to an assetb. asset and a credit to an assetc. expense and a credit to a liabilityd. expense and a credit to an asset23. If the company uses special journals, all payments should be recorded on a:a. cash receipts journalb. cash payments journalc. purchases journald. sales journal24. A characteristic of purchases is:a. it has a debit normal balanceb. it reduces net incomec. that it is used to record the purchase of merchandise to be resoldd. All of the above.25. Which of the following transactions will cause one asset to be debited and another to becredited when the periodic inventory system is in use?a. purchased merchandise on accountb. purchased merchandise for cashc. purchased office supplies for cashd. purchased office supplies on account
