Exam 9: Sales and Purchases

Jones Supply Co. sold merchandise on account to J. Smith, invoice no. 151, for $185.50, plus 6% sales tax. What is the entry made to Accounts Receivable and Sales Tax Payable respectively?

Which of the following is recorded in the sales journal?

Chandler Company bought goods from Lisel Company, with shipping terms FOB destination. Which of the following statements correctly identifies who is to pay the freight bill when the title is transferred?

Some of the goods that were previously sold to a customer on account were returned to the seller, and the seller used a form to show the amount and terms of the return. The source document for the journal entry for this return is called a

A liability account used to record sales tax collected and owed:

Jimmie Jones purchases merchandise from GPS Industries for $15,500 on account. The terms were FOB Destination with freight costs of $100. Upon inspection of the merchandise received, Jimmie Jones discovers damaged goods in the amount of $2,500 and requests to return the damaged merchandise to GPS Industries. Once the return is processed, what is the new balance owed by Jimmie Jones?

The total of the customer accounts receivable ledger at the end of the accounting period must equal the total of the

The total of the schedule of accounts receivable must equal

The use of a purchases journal makes any posting to the general ledger unnecessary.

The account used to record transportation costs of goods purchased for resale is

For a sale of $300, on which 8 percent sales tax is charged, the amount debited to Accounts Receivable is $324.

After posting the total goods sold on account to the Accounts Receivable account, the accountant places a check mark below the Accounts Receivable column in the sales journal.

When goods are shipped FOB shipping point, which of the following is NOT true?

Under the accrual basis of accounting, sales on account are not recorded in the sales journal until payment is received.

A schedule of Accounts Receivable is prepared from:

A subsidiary ledger that contains individual accounts of creditors.

A debit to Accounts Payable for a return of goods on account will be posted to the controlling account but not to the individual creditor's account.

The purchases journal is used for the purchase of

The ledger that provides a separate record of credit customers and their respective balances is:

When a customer returns goods for credit, the transaction is recorded in the purchases journal.