Question 1

The general ledger and the accounts receivable subsidiary ledger are the same book.

Accepted Answer

A) True 
 B)False

Question 2

Merchandise is:

Accepted Answer

A) the same as inventory. 
B) an asset. 
C) the same as gross sales. 
D) Both A and B are correct. 
A) the same as inventory. 
B) an asset. 
C) the same as gross sales. 
D) Both A and B are correct.

Question 3

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.
-$$\begin{array} { | l | c | c | c | } 
\hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 \
\hline \text { Sales Returns and } & & & \
\text { Allowances } & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | c | c | } 
\

Question 4

Calculate gross sales:
net sales = $100,000
sales returns and allowances - $25,000
sales discounts - $20,000
accounts receivable - $12,000

Accepted Answer

The answer of Calculate gross sales:
net sales = $100,000
sales returns...

Question 5

The normal balance of the Sales Returns and Allowances account is:

Accepted Answer

A) a credit. 
B) a debit. 
C) zero. 
D) It doesn't have a normal balance. 
A) a credit. 
B) a debit. 
C) zero. 
D) It doesn't have a normal balance.

Question 6

If a customer returns merchandise,the income for that period will be reduced.

Accepted Answer

A) True 
 B)False

Question 7

Plymouth Sharks Hockey Accessories 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 and have a 2/10, n/30 discount terms.
December 2 Sold merchandise priced at $\$ 100$ to Cathy Norton on account. December 4 5old merchandise priced at $\$ 125$ to a cash customer.
December 10 Payment from Cathy Norton received.
December 16 Eash customer returned \$47 worth of merchandise.
-Prepare the necessary general journal entry for December 10.

Accepted Answer

None

Question 8

Sales is a revenue account.

Accepted Answer

A) True 
 B)False

Question 9

Sales Tax Payable represents an asset on the books of the seller.

Accepted Answer

A) True 
 B)False

Question 10

Gross sales equals:

Accepted Answer

A) net sales minus sales discount. 
B) sales discount less net income. 
C) the total of cash sales and credit sales. 
D) net income plus gross profit. 
A) net sales minus sales discount. 
B) sales discount less net income. 
C) the total of cash sales and credit sales. 
D) net income plus gross profit.

Question 11

Net Sales equals Gross Sales - Sales Returns and Allowances - Cash Sales.

Accepted Answer

A) True 
 B)False

Question 12

Determine the amount of cash collected on a credit sale with a price of $80,000 and credit terms of 1/10,n/30,assuming the payment was after the discount period had expired.
$ ________

Accepted Answer

The answer of Determine the amount of cash collected on...

Question 13

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 error will cause:

Accepted Answer

A) the net income for the period to be understated. 
B) the net income for the period to be overstated. 
C) the control account to not agree with the subsidiary ledger. 
D) the assets to be overstated. 
A) the net income for the period to be understated. 
B) the net income for the period to be overstated. 
C) the control account to not agree with the subsidiary ledger. 
D) the assets to be overstated.

Question 14

Credit terms of 1/10,n/30 mean that:

Accepted Answer

A) 1% discount is allowed if the bill is paid within between 10 and 30 days. 
B) a 1% discount is allowed if the bill is paid within 30 days. 
C) a 1% discount is allowed if the bill is paid after 10 days. 
D) a 1% discount is allowed if the customer pays the bill within 10 days,or the entre amount is due within 30 days. 
A) 1% discount is allowed if the bill is paid within between 10 and 30 days. 
B) a 1% discount is allowed if the bill is paid within 30 days. 
C) a 1% discount is allowed if the bill is paid after 10 days. 
D) a 1% discount is allowed if the customer pays the bill within 10 days,or the entre amount is due within 30 days.

Question 15

Terms of 3/10,n/30 means that a customer is allowed a 10% discount in 30 days.

Accepted Answer

A) True 
 B)False

Question 16

The Dairy 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.
April 13 Sold merchandise priced at $\$ 500$ to Jan Ellsworth on account.
April 14 Sold merchandise priced at $\$ 350$ to a cash customer.
April 15 Sold merchandise priced at $\$ 150$ 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 14.

Accepted Answer

None

Question 17

Plymouth Sharks Hockey Accessories 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 and have a 2/10, n/30 discount terms.
December 2 Sold merchandise priced at $\$ 100$ to Cathy Norton on account. December 4 5old merchandise priced at $\$ 125$ to a cash customer.
December 10 Payment from Cathy Norton received.
December 16 Eash customer returned \$47 worth of merchandise.
-Prepare the necessary general journal entry for December 4.

Accepted Answer

None

Question 18

The total of all cash sales and credit sales equals:

Accepted Answer

A) net sales. 
B) gross sales. 
C) sales discount. 
D) sales returns and allowances. 
A) net sales. 
B) gross sales. 
C) sales discount. 
D) sales returns and allowances.

Question 19

Sue's Jewelry sold 20 necklaces for $25 each to a credit customer.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the original sale would include:

Accepted Answer

A) a debit to Accounts Receivable for $530. 
B) a debit to Accounts Receivable for $500. 
C) a debit to Sales for $530. 
D) a debit to Sales for $500. 
A) a debit to Accounts Receivable for $530. 
B) a debit to Accounts Receivable for $500. 
C) a debit to Sales for $530. 
D) a debit to Sales for $500.

Question 20

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger.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 control account to not agree with the subsidiary ledger. 
D) the assets to be overstated. 
A) the net income for the period to be overstated. 
B) the net income for the period to be understated. 
C) the control account to not agree with the subsidiary ledger. 
D) the assets to be overstated.

Exam 9: Sales and Cash Receipts

The general ledger and the accounts receivable subsidiary ledger are the same book.

Merchandise is:

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. - Column 1 Column 2 Column 3 Sales Returns and Allowances

Calculate gross sales: net sales = $100,000 sales returns and allowances - $25,000 sales discounts - $20,000 accounts receivable - $12,000

The normal balance of the Sales Returns and Allowances account is:

If a customer returns merchandise,the income for that period will be reduced.

Sales is a revenue account.

Sales Tax Payable represents an asset on the books of the seller.

Gross sales equals:

Net Sales equals Gross Sales - Sales Returns and Allowances - Cash Sales.

Determine the amount of cash collected on a credit sale with a price of $80,000 and credit terms of 1/10,n/30,assuming the payment was after the discount period had expired. $ ________

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 error will cause:

Credit terms of 1/10,n/30 mean that:

Terms of 3/10,n/30 means that a customer is allowed a 10% discount in 30 days.

The total of all cash sales and credit sales equals:

Sue's Jewelry sold 20 necklaces for $25 each to a credit customer.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the original sale would include:

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger.This error will cause:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, plant, equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters