Chapter 7

Service business

A company that provides services, such as bookkeeping company, s a type of business called a

Wholesale business

A manufacturer that sells goods to retailers is called a

Credit memorandum

A note verifying that a customer's account is being reduced by the amount of a sales return or sales allowance plus any sales tax that may have been involved is called

sales allowance

A reduction in the price originally charged to customers for goods or services is called a

Sales journal

A special journal that is intended only for credit sales is called a

manufacturing company

A type of company that sells goods it produces is called a

Accounts payable

Accounts for credit vendors/suppliers, and other creditors

Credit Sales

Open-account credit, business credit cards, bank credit cards, and cards issued by credit card companies

Debit Balance

Sales return and allownaces is a contra revenue account and has a normal (debit/credit)

Sales return

A company's acceptance of a return of goods from a customer is called

debit to sales returns and allowances for $400 credit to accounts receivable for $440 debit to sales tax payable for $40

A bike sales company accepted a return of one damaged bike from Sana Gill that was originally sold on credit on Sales Slip 239 for $440, which included sales tax of $40. The return transaction will include which of the following entries:

Subsidiary ledger

A ledger that contains accounts of a single type, such as an account receivable ledgers for each customer, is known as a

control accounts

An account that serves as a link between the subsidiary ledger and the general ledger, and whose balance summarizes the balances of its related accounts in the subsidiary ledger is called a

invoice

An accounting term for a document that refers to a customer billing for merchandise bought on credit is called

General

Assets, liabilities, owner's equity, revenue, and expense accounts

credit to sales tax payable $90 credit to sales $900 debit to accounts receivable $990

Best computers sold a computer to lee Jones on credit; issued sales slip 211 for $900 plus sales tax $90. The entry to record this transaction will include a

Purchases Sales Cash receipts

Examples of special journals, used to record only one type of transaction, includes which of the following:

Sales Purchases Cash receipts

Examples of special, used to only record one type of transaction, includes which of the following

credits related to sales tax payable debits to accounts receivable credits related to sales

The sales journal records

decrease in net sales decrease in net income

The ultimate effect of a sales return on a company's financial statements includes which of the following

False

There are only two basic types of businesses: service businesses and manufacturing businesses

debit to discount expense for $5 credit to sales $100 debit to accounts receivable $95

Visa charges a 5% discount fee on the $100 sale charged by a customer and remits the balance to the company. The company will record which of the following entries in the sales journal

Accounts receivable subsidiary ledger

What document is necessary to prepare the schedule of accounts receivable

retail business

a company that sells goods directly to the customers

Trade discount

a discount offered to customers based on volume is know as a

chart of accounts

a list of accounts used by a business to record its financial transactions is called

Sales allowance

a price reduction to customers for goods or services is called a sales

merchandising company

a type of company that purchases goods for resale is called a

Accounts receivable

accounts for credit customers

New accounts

merchandise inventory Sales Tax Payable Sales Sales Return and allowances Purchases Freight in Purchases returns and allowances Purchase discounts

list price

the established retail price is known as the

$450

the list price is $500 and the trade discount is a %10. The net price is

Merchandise inventory account

the stock of goods kept on hand are recorded in the

cash payments

to record all disbursements of cash

General

to record all transactions that are not recorded in another special journal and all adjusting and closing entries

Cash receipts

to record cash received from all sources

Purchases

to record purchases of merchandise on credit

Sales

to record sales of merchandise on credit

Running balance customer address debits and credits to a customer's accounts receivable

which of the following is recorded in an accounts receivable subsidiary ledger