Question 1

A record showing the activity and the balances owed by each customer is called the:

Accepted Answer

A)   accounts payable journal.
B)   sales journal.
C)   bank journal.
D)   accounts receivable subsidiary ledger.E) A) and D)
F) A) and B)

Question 2

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 3

Net Sales equals Gross Sales - Sales Returns and Allowances - Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 4

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 30.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Question 5

A characteristic of Sales Returns and Allowances is that:

Accepted Answer

A)   it has a credit balance.
B)   it tracks returns from customers.
C)   it is a contra-revenue account.
D)   B and C are correct.E) None of the above
F) A) and B)

Question 6

The side that increases the balance of the Sales Discount account is:

Accepted Answer

A)   a credit.
B)   a debit.
C)   zero.
D)   It does not have a normal balance.E) A) and D)
F) C) and D)

Question 7

Sales tax collected by the seller is not included in the seller's total revenue.

Accepted Answer

A) True 
 B)False

Question 8

Betsy's pottery sold 300 tiles at $40 each to a charge customer, terms 1/10, n/30. Which entry is required to record this transaction? (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Accepted Answer

A)   Debit Cash $12,000; credit Tile Sales $12,000
B)   Debit Accounts Payable $11,880; credit Tile Sales $11,880
C)   Debit Accounts Receivable $11,880; debit Sales Discount $120; credit Tile Sales $12,000
D)   Debit Accounts Receivable $12,000; credit Tile Sales $12,000E) All of the above
F) C) and D)

Question 9

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 15.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Question 10

Sold merchandise subject to a sales tax, accepting cash. This will be recorded with:

Accepted Answer

A)   a credit to an asset account.
B)   a credit to a liability account.
C)   a debit to Sales.
D)   a debit to Sales Tax Payable.E) B) and D)
F) C) and D)

Question 11

Received payment, within the discount period, for merchandise sold previously. This will be recorded with:

Accepted Answer

A)   a credit to an asset account.
B)   a debit to a liability account.
C)   a debit to Sales.
D)   a credit to a contra-sales account.E) B) and C)
F) A) and B)

Question 12

B&B Lumber reports gross sales of $120,000. If sales returns and allowances are $11,000 and sales discounts are $2,500, what are the net sales?

Accepted Answer

A)   $122,500
B)   $111,500
C)   $106,500
D)   $109,000E) B) and C)
F) A) and B)

Question 13

Individual credit customer accounts are kept in the Accounts Receivable Subsidiary Ledger.

Accepted Answer

A) True 
 B)False

Question 14

The arrangements between buyer and seller as to when payments for merchandise are to be made are called:

Accepted Answer

A)   credit terms.
B)   net allowance.
C)   cash on demand.
D)   discount period.E) None of the above
F) A) and B)

Question 15

Prepare the necessary general journal entry for December 4.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of Prepare the necessary general journal entry for...

Question 16

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 17

Jane's Jewelry sold 50 necklaces for $45 each to a credit customer. The invoice included a 4% sales tax and payment terms of 7/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include: (Round your calculation to the nearest whole dollar.)

Accepted Answer

A)   a debit to Sales Returns and Allowances for $45.
B)   a debit to Sales Returns and Allowances for $225.
C)   a credit to Sales Tax Payable for $9.
D)   a debit to Accounts Receivable for $45.E) A) and B)
F) A) and C)

Question 18

Explain how the record keeping differs between a cash sale and a credit sale.

Accepted Answer

With a cash sale it is the customer's re...

Question 19

A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause:

Accepted Answer

A)   the net income for the period to be overstated.
B)   the net income for the period to be understated.
C)   the sales discount account to be understated.
D)   the net sales account for the period to be overstated.E) All of the above
F) None of the above

Question 20

Every controlling account must have its own:

Accepted Answer

A)   primary ledger.
B)   general ledger.
C)   subsidiary ledger.
D)   general journal.E) All of the above
F) None of the above

Exam 9: Sales and Cash Receipts

Individual credit customer accounts are kept in the Accounts Receivable Subsidiary Ledger.

Correct Answer
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For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. -

Correct Answer
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Explain how the record keeping differs between a cash sale and a credit sale.

Correct Answer
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With a cash sale it is the customer's re...
View Answer

Correct Answer
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B&B Lumber reports gross sales of $120,000. If sales returns and allowances are $11,000 and sales discounts are $2,500, what are the net sales?

Correct Answer
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Prepare the necessary general journal entry for December 4. __________

Correct Answer
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A record showing the activity and the balances owed by each customer is called the:

Correct Answer
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A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause:

Correct Answer
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Every controlling account must have its own:

Correct Answer
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Received payment, within the discount period, for merchandise sold previously. This will be recorded with:

Correct Answer
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Sold merchandise subject to a sales tax, accepting cash. This will be recorded with:

Correct Answer
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Net Sales equals Gross Sales - Sales Returns and Allowances - Accounts Receivable.

Correct Answer
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Betsy's pottery sold 300 tiles at $40 each to a charge customer, terms 1/10, n/30. Which entry is required to record this transaction? (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Correct Answer
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For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. -

Correct Answer
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The side that increases the balance of the Sales Discount account is:

Correct Answer
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Correct Answer
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Sales tax collected by the seller is not included in the seller's total revenue.

Correct Answer
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Jane's Jewelry sold 50 necklaces for $45 each to a credit customer. The invoice included a 4% sales tax and payment terms of 7/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include: (Round your calculation to the nearest whole dollar.)

Correct Answer
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The arrangements between buyer and seller as to when payments for merchandise are to be made are called:

Correct Answer
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A characteristic of Sales Returns and Allowances is that:

Correct Answer
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Exam 9: Sales and Cash Receipts

Individual credit customer accounts are kept in the Accounts Receivable Subsidiary Ledger.

Correct AnswerverifiedShow Answer

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. -

Correct AnswerverifiedShow Answer

Explain how the record keeping differs between a cash sale and a credit sale.

Correct AnswerverifiedWith a cash sale it is the customer's re...View AnswerShow Answer

Correct AnswerverifiedShow Answer

B&B Lumber reports gross sales of $120,000. If sales returns and allowances are $11,000 and sales discounts are $2,500, what are the net sales?

Correct AnswerverifiedShow Answer

Prepare the necessary general journal entry for December 4. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

Correct AnswerverifiedShow Answer

A record showing the activity and the balances owed by each customer is called the:

Correct AnswerverifiedShow Answer

A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause:

Correct AnswerverifiedShow Answer

Every controlling account must have its own:

Correct AnswerverifiedShow Answer

Received payment, within the discount period, for merchandise sold previously. This will be recorded with:

Correct AnswerverifiedShow Answer

Sold merchandise subject to a sales tax, accepting cash. This will be recorded with:

Correct AnswerverifiedShow Answer

Net Sales equals Gross Sales - Sales Returns and Allowances - Accounts Receivable.

Correct AnswerverifiedShow Answer

Betsy's pottery sold 300 tiles at $40 each to a charge customer, terms 1/10, n/30. Which entry is required to record this transaction? (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Correct AnswerverifiedShow Answer

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. -

Correct AnswerverifiedShow Answer

The side that increases the balance of the Sales Discount account is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Sales tax collected by the seller is not included in the seller's total revenue.

Correct AnswerverifiedShow Answer

Jane's Jewelry sold 50 necklaces for $45 each to a credit customer. The invoice included a 4% sales tax and payment terms of 7/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return would include: (Round your calculation to the nearest whole dollar.)

Correct AnswerverifiedShow Answer

The arrangements between buyer and seller as to when payments for merchandise are to be made are called:

Correct AnswerverifiedShow Answer

A characteristic of Sales Returns and Allowances is that:

Correct AnswerverifiedShow Answer

Correct Answer
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With a cash sale it is the customer's re...
View Answer

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Prepare the necessary general journal entry for December 4. __________

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