Which of the Following Is True of a Purchases Journal

question 109

Multiple Choice

Which of the following is true of a purchases journal?

• A)In a purchase journal, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR for a periodic inventory system.
• B)Cash purchases are recorded in the purchases journal.
• C)A purchases journal is not used for a perpetual inventory system.
• D)In a purchases journal, the Other Accounts DR columns are used for purchases on account of items other than merchandise inventory and office supplies.

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Definitions:

Rate of Return

A measure of the profitability of an investment, expressed as a percentage of the original investment.

Present Value

The present valuation of money expected in the future or cash inflow sequences, with adjustments for a predetermined rate of return.

Security's Value

The market worth or price at which a financial security, such as a bond or stock, can be bought or sold.

Future Cash Flows

Projected movement of money into and out of a business, essential for budgeting, financial planning, and investment analysis.