accounting- ch.14

false

a bankcard holder is a charge customer of the business from whom the purchase is being made

false

a cash discount is an advantage only to the buyer because he is able to purchase the merchandise at a reduced cost

false

a cash discount is calculated on the total of a sales slip, including sales tax

false

a cash discount is recorded at the time of the sale

sales discount

a cash discount issues by the seller is a(n) __

credit card

a charge customer is entitled to charge merchandise with a(n) __

sales slip

a form that lists the details of a sale and is used as a record of the transaction is a(n) __

sales allowance

a price reduction granted by a business for damaged goods kept by the customer is called a(n) __

false

a sales discount increases the revenue account Sales

true

a sales slip is usually prepared in multiple copies with the customer receiving the original and the business keeping the remaining copies

subsidiary ledger

a(n) __ is a book that is summarized in a controlling account in the general ledger

wholesaler

a(n) __ is a business that sells out to retailers

retailer

a(n) __ is a business that sells to final user

false

bankcard sales are processed the same way as a store's regular charge card sales

true

bankcard sales are recorded like cash sales because a business expects to receive its cash within a few days of the deposit

true

business are requires to act as agents for local and state governments in the collection of taxes

false

cash discounts increase the amount to be received from charge customers

true

"a 2/10, n/30" means that customers deduct 2% of the cost of the merchandise if they pay within 10 days. Otherwise they must pay the full amount within 30days.

if merchandise is sold for $325.60 and the sales tax rate is 5%, the amount to be collected from a charge customer is __

- $309.32 - $341.88 - $325.60 - $331.88 Answer: $341.88

if merchandise is sold for $417.80 and the sales tax rate is 4%, the amount of sales tax is __

- $434.51 - $16.17 -$20.89 - none of the above Answer: none of the above

if the date of the invoice is May 14, the credit terms are 2/10, n/30, and the invoice was received May 16, the last date the discount may be taken is __

- May 26 - June 12 - May 24 - May 14 Answer: May 24

controlling account

accounts receivable is a(n) __ because its balance must equal the total of the accounts receivable subsidiary ledger

contra account

an account whose balance decreases another accounts balance is a(n) __

retailer/ merchandising business

an example of a(n) __ is Wal-Mart

sales returns and allowances is classified as a __

contra revenue account

true

customer accounts are listed in alphabetical order in the accounts receivable subsidiary ledger

true

electrical supply companies, auto parts distributors, and food supply companies are wholesalers

true

in a merchandising business, the most frequent type of transaction is the sale of merchandise

false

in most states, slated made to school districts and other governmental agents are taxable

sales tax payable is classified as a(n) __

liability account

sales tax

many states and some cities require that a business add a(n) __, or a percentage of the selling price of the goods at the time of the sale

sales return

merchandise returned to the seller for full credit is a(n) __

true

renumbered sales slips help business keep track of all sales made on account

true

retailers include clothing stores and automobile dealerships

false

sales discounts increase the sales account

true

sales taxes are not usually charged to governmental agencies

accounts receivable subsidiary ledger

the __ maintains a list in alphabetical order of the charge customers of a business

credit terms

the __ of a sale set out the time allowed for payment

true

the account Merchandise Inventory is classified in the chart of accounts as an asset

cash discount

the amount a customer may deduct if the payment for merchandise is made within a certain time is a(n) __

cash receipt

the cash received by a business is referred to as a(n) __

true

the cash register tape is the source document for the journal entry to record the day's cash sales

credit

the decrease side of the Merchandise Inventory account is a __

credit

the decrease side of the Sales Discounts accounts is a __

debit

the decrease side of the Sales Tax Payable account is a __

debit

the decrease side of the Sales account is a __

merchandise

the goods a business buys for resale to customers are known as __

debit

the increase side of the Merchandise Inventory is a __

debit

the increase side of the Sales Discounts account is a

credit

the increase side of the Sales Tax Payable account is a __

credit

the increase side of the Sales account is a

true

the proof is usually prepared at the end of each day to show that the amount in the cash register equals the amount of cash sales recorded on the cash register tape

sales

the revenue account for a merchandising business is __

false

the sale on account is paid for in cash when the merchandise is sold

false

two of the accounts used by merchandising businesses are Merchandise Inventory and Professional Fees

true

when a cash sale occurs, the details of the sale are printed on two tapes in the cash register at the same time

sales on account

a(n) __ permits a customer to pay for the merchandise at a later date

receipt

a(n) __ is a form that serves as a record of cash received

cash sale

a(n) __ is a transaction that occurs when a business receives full payment for the merchandise sold at the time of the sale

true

Sales Discount is classified as a contra revenue account

bankcard

a(n) __ is a credit card issued by a bank that and honored by many businesses

charge customer

a(n) __ is a customer to whom a sale on account is made

credit memorandum

a(n) __ is a document prepared by the seller granting credit for damaged or returned merchandise

false

merchandising businesses sell only on a cash and carry basis

inventory

the items of merchandise a business has in stockade referred to as __

false

the most widely used bankcard in North America is American Express

debit

the normal balance side of the Merchandise Inventory account is a __

debit

the normal balance side of the Sales Discounts accounts is a __

credit

the normal balance side of the Sales Tax Payable account is a __

credit

the normal balance side of the Sales accounts is a __