Question 1

A summary accounts receivable account is called a(n)

Accepted Answer

A)  controlling account. 
B)  balance account. 
C)  master account. 
D)  lead account. 
A)  controlling account. 
B)  balance account. 
C)  master account. 
D)  lead account.

Question 2

Match the terms with the definitions.
-Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 3

A credit memorandum for $156 (sale price of merchandise $150; sales tax of $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly,

Accepted Answer

A)  Sales would be debited for $6. 
B)  Sales would be debited for $150. 
C)  Sales would be debited for $156. 
D)  Sales would not be debited. 
A)  Sales would be debited for $6. 
B)  Sales would be debited for $150. 
C)  Sales would be debited for $156. 
D)  Sales would not be debited.

Question 4

A retail business allows customers to enter the store, select the merchandise they want, and bring it to a sales clerk.

Accepted Answer

A) True 
 B)False

Question 5

Match the terms with the definitions.
-Discounts to encourage prompt payment by customers who buy merchandise on account.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 6

Match the terms with the definitions.
-A transfer of merchandise from one business or individual to another in exchange for cash or a promise to pay cash.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 7

Match the terms with the definitions.
-A document created as evidence of a sale in a retail business.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 8

Copies of a sales invoice are used to do all of the following EXCEPT

Accepted Answer

A)  ship the merchandise. 
B)  bill the customer. 
C)  record the sale. 
D)  record the receipt of merchandise. 
A)  ship the merchandise. 
B)  bill the customer. 
C)  record the sale. 
D)  record the receipt of merchandise.

Question 9

Which of the following accounts is NOT used to account for merchandise sales transactions?

Accepted Answer

A)  Sales 
B)  Sales Tax Payable 
C)  Sales Returns and Allowances 
D)  Accounts Payable 
A)  Sales 
B)  Sales Tax Payable 
C)  Sales Returns and Allowances 
D)  Accounts Payable

Question 10

The sales account is a revenue account.

Accepted Answer

A) True 
 B)False

Question 11

A credit memo states the amount of a sales allowance or return.

Accepted Answer

A) True 
 B)False

Question 12

Merchandise returned by the customer for a refund is called a sales return.

Accepted Answer

A) True 
 B)False

Question 13

Match the terms with the definitions.
-An alphabetical or numerical listing of customer accounts and balances, usually prepared at the end of the month.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 14

If the schedule of accounts receivable total and the Accounts Receivable balance total do not agree, a correcting entry is made to balance the two totals.

Accepted Answer

A) True 
 B)False

Question 15

The amounts for sales returns and allowances, sales discounts, and net sales added together equal gross sales.

Accepted Answer

A) True 
 B)False

Question 16

To enter a cash sale, the journal entry includes

Accepted Answer

A)  debiting Sales, debiting Sales Tax Payable, and crediting Cash. 
B)  debiting Sales Tax Payable, debiting Cash, and crediting Sales. 
C)  debiting Sales, debiting Cash, and crediting Sales Tax Payable. 
D)  debiting Cash, crediting Sales, and crediting Sales Tax Payable. 
A)  debiting Sales, debiting Sales Tax Payable, and crediting Cash. 
B)  debiting Sales Tax Payable, debiting Cash, and crediting Sales. 
C)  debiting Sales, debiting Cash, and crediting Sales Tax Payable. 
D)  debiting Cash, crediting Sales, and crediting Sales Tax Payable.

Question 17

When a business uses a subsidiary accounts receivable ledger, there is no need to keep an accounts receivable account in the general ledger.

Accepted Answer

A) True 
 B)False

Question 18

Match the terms with the definitions.
-A document issued when credit is given for merchandise returned or for an allowance.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 19

Match the terms with the definitions.
-A separate ledger containing an individual account receivable for each customer, kept in either alphabetical or numerical order.

Accepted Answer

A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable 
A) accounts receivable ledger 
B) cash discounts 
C) controlling account 
D) credit memo 
E) merchandising business
F)sale
G)sales allowances
H)sales discounts
I)sales invoice
J)sales return
K)sales ticket
L)schedule of accounts receivable

Question 20

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for

Accepted Answer

A)  $84.60. 
B)  $90.00. 
C)  $95.40. 
D)  $93.60. 
A)  $84.60. 
B)  $90.00. 
C)  $95.40. 
D)  $93.60.

Exam 10: Accounting for Sales and Cash Receipts

A summary accounts receivable account is called a(n)

Match the terms with the definitions. -Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise.

A credit memorandum for $156 (sale price of merchandise $150; sales tax of $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly,

A retail business allows customers to enter the store, select the merchandise they want, and bring it to a sales clerk.

Match the terms with the definitions. -Discounts to encourage prompt payment by customers who buy merchandise on account.

Match the terms with the definitions. -A transfer of merchandise from one business or individual to another in exchange for cash or a promise to pay cash.

Match the terms with the definitions. -A document created as evidence of a sale in a retail business.

Copies of a sales invoice are used to do all of the following EXCEPT

Which of the following accounts is NOT used to account for merchandise sales transactions?

The sales account is a revenue account.

A credit memo states the amount of a sales allowance or return.

Merchandise returned by the customer for a refund is called a sales return.

Match the terms with the definitions. -An alphabetical or numerical listing of customer accounts and balances, usually prepared at the end of the month.

If the schedule of accounts receivable total and the Accounts Receivable balance total do not agree, a correcting entry is made to balance the two totals.

The amounts for sales returns and allowances, sales discounts, and net sales added together equal gross sales.

To enter a cash sale, the journal entry includes

When a business uses a subsidiary accounts receivable ledger, there is no need to keep an accounts receivable account in the general ledger.

Match the terms with the definitions. -A document issued when credit is given for merchandise returned or for an allowance.

Match the terms with the definitions. -A separate ledger containing an individual account receivable for each customer, kept in either alphabetical or numerical order.

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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