Question 1

Urban Camping sold goods for $200 to a charge customer. The customer returned for credit $90 worth of goods. Which entry is required to record the return transaction?

Accepted Answer

A) Debit Sales Returns and Allowances $90; credit Accounts Receivable for $90 
B) Debit Sales Returns and Allowances for $90; credit Sales for $90 
C) Debit Sales $90; credit Sales Returns and Allowances $90 
D) Debit Accounts Receivable $90; credit Sales Returns and Allowances for $90 
A) Debit Sales Returns and Allowances $90; credit Accounts Receivable for $90 
B) Debit Sales Returns and Allowances for $90; credit Sales for $90 
C) Debit Sales $90; credit Sales Returns and Allowances $90 
D) Debit Accounts Receivable $90; credit Sales Returns and Allowances for $90

Question 2

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

Question 3

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.
  
-Prepare the necessary general journal entry for April 13.

Accepted Answer

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

Question 4

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 5

Determine the amount of cash collected at the time of making a sale of $1,000 worth of merchandise subject to a 6% sales tax.
$ ________

Accepted Answer

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

Question 6

Logan's Art studio was moving and sold furniture that was no longer needed for cash. The entry would include:

Accepted Answer

A) a credit to Sales. 
B) a debit to Sales. 
C) a credit to Furniture. 
D) a debit to Furniture. 
A) a credit to Sales. 
B) a debit to Sales. 
C) a credit to Furniture. 
D) a debit to Furniture.

Question 7

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 8

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.
  
-Prepare the necessary general journal entry for April 30.

Accepted Answer

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

Question 9

When a customer returns defective office supplies the Sales Returns and Allowances account will be debited.

Accepted Answer

A) True 
 B)False

Question 10

Explain why, when a customer returns merchandise after it was paid for, he/she may or may not receive credit equal to the invoice value of the merchandise returned.

Accepted Answer

If the payment was made before

Question 11

A reduction given to customers for early payment is a:

Accepted Answer

A) sales returns and allowance. 
B) purchase discount. 
C) sales discount. 
D) purchase return. 
A) sales returns and allowance. 
B) purchase discount. 
C) sales discount. 
D) purchase return.

Question 12

The Coral Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to credit terms of 1/10, n/30.
  
-Prepare the necessary general journal entry for July 16, Sold merchandise on account with an invoice price of $4,500 to Carter and Co.

Accepted Answer

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

Question 13

Payment for merchandise sold on credit for $100 subject to 1/10 n/30 was received within the discount period-$99 was received. This was recorded with a debit to Sales Discounts for $1, a debit to Cash for $99, and a credit to Accounts Receivable $100, but no mention was made of the subsidiary ledger account. 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.

Question 14

Recording to the accounts receivable subsidiary ledger is done:

Accepted Answer

A) daily. 
B) monthly. 
C) quarterly. 
D) annually. 
A) daily. 
B) monthly. 
C) quarterly. 
D) annually.

Question 15

Individual credit customer accounts are kept in the general ledger.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Determine the amount of cash collected on a credit sale in the amount of $4,500, subject to a 6% sales tax when $500 worth of merchandise has already been returned for credit.
$ ________

Accepted Answer

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

Question 18

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.
  
-Prepare the necessary general journal entry for April 20.

Accepted Answer

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

Question 19

If cash flow is so important to merchandisers, why do they extend credit to their customers?

Accepted Answer

A customer who is limited to m

Question 20

Merchants who buy goods from wholesalers for resale to customers are:

Accepted Answer

A) merchandisers. 
B) retailers. 
C) service companies. 
D) None of the above are correct. 
A) merchandisers. 
B) retailers. 
C) service companies. 
D) None of the above are correct.

Exam 9: Sales and Cash Receipts

Urban Camping sold goods for $200 to a charge customer. The customer returned for credit $90 worth of goods. Which entry is required to record the return transaction?

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

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. -Prepare the necessary general journal entry for April 13.

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

Determine the amount of cash collected at the time of making a sale of $1,000 worth of merchandise subject to a 6% sales tax. $ ________

Logan's Art studio was moving and sold furniture that was no longer needed for cash. The entry would include:

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 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. -Prepare the necessary general journal entry for April 30.

When a customer returns defective office supplies the Sales Returns and Allowances account will be debited.

Explain why, when a customer returns merchandise after it was paid for, he/she may or may not receive credit equal to the invoice value of the merchandise returned.

A reduction given to customers for early payment is a:

Recording to the accounts receivable subsidiary ledger is done:

Individual credit customer accounts are kept in the general ledger.

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

Determine the amount of cash collected on a credit sale in the amount of $4,500, subject to a 6% sales tax when $500 worth of merchandise has already been returned for credit. $ ________

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. -Prepare the necessary general journal entry for April 20.

If cash flow is so important to merchandisers, why do they extend credit to their customers?

Merchants who buy goods from wholesalers for resale to customers are:

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

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