Session 7 - Quiz Questions

If Morgan Industries issued a Credit Memorandum on January 20 for a return of $1,100 of merchandise purchased on account by Doug Bowen, plus 6 percent sales tax, the credit memorandum total would be: $1,034 $1,100 $1,166 $1,232

$1,166

Connor Company sells merchandise for $2,000 on account to Market Industries on January 21, at 1/10, n/30, Invoice 190. Market returns $200 of the merchandise on January 23, receiving credit memorandum 120 from Connor. What amount would Market pay if they submit payment on January 29? $1,980 $1,782 $1,800 $1,780

$1,782

Ferrero Bakery made a sale of $80, plus 5 percent sales tax, to a customer using a bank credit card. The credit card company charges a 2 percent discount fee. What is the amount of the credit card expense on this sale? $1.68 $82.32 $1.60 $82.40

$1.68

Field Hardware Supply makes a sale on account for $100, plus 6 percent sales tax. In journalizing this transaction, what amount should be debited to Accounts Receivable? $100 $94 $106 $6

$106

What are the net sales for a business that has cash sales of $42,000, credit sales of $88,000, sales returns and allowances of $6,300, sales discounts of $1,400, and sales tax payable of $10,400? $80,300 $111,900 $122,300 $130,000

$122,300

Suppose the list price of goods is $1,000 and the trade discount is 20 percent. What is the amount of the discount and what is the net price the wholesaler records as sales? $20; $1,000 $200; $800 $200; $1,000 $800; $200

$200; $800

Merchandise is sold on credit for $900 plus 7 percent sales tax. The entry in the general journal will include a debit to Accounts Receivable for: $63.00 $837.00 $900.00 $963.00

$963.00

An account manager would like to know the balance of a certain customer's account. That information can be found in the: Sales account in the general ledger. Accounts receivable ledger. Accounts Receivable account in the general ledger. Sales ledger.

Accounts receivable ledger.

What is the name of the account used to record sales of merchandise inventory? Sales Returns and Allowances Accounts Receivable Fees Income Sales

Sales

The Sales Returns and Allowances account is classified as a(an): asset account contra liability account expense account contra revenue account

contra revenue account

What is the account classification of the Sales Discounts account? expense liability contra-revenue asset

contra-revenue

What term is used to describe the Accounts Receivable account in the general ledger? control account contra revenue account contra asset account subsidiary account

control account

Fees charged by a credit card company for processing sales made to customers paying with bank credit cards are debited to which account? accounts receivable sales returns and allowances miscellaneous income credit card expense

credit card expense

Assuming that no sales tax is collected, a business credit card sale is recorded as a: debit to Credit Cards Receivable and a credit to Sales. debit to Sales and a credit to Credit Cards Receivable. debit to Accounts Receivable and a credit to Sales. debit to Sales and a credit to Accounts Receivable

debit to Accounts Receivable and a credit to Sales.

The journal entry to record the return of product by a customer would include a: debit to Sales. debit to Sales Returns and Allowances. credit to Sales Returns and Allowances. credit to Sales.

debit to Sales Returns and Allowances.

The journal entry to record the return of product by a customer would include a: debit to sales credit to sales credit to sales tax payable debit to sales tax payable

debit to sales tax payable

Which of the following may result from a credit policy that is too lenient? increased sales volume accompanied by a high level of losses increased sales volume accompanied by a low level of losses a low level of losses and a decrease in sales volume a high level of losses and a decrease in sales volume

increased sales volume accompanied by a high level of losses

What is the proper classification of the Sales Tax Payable account? revenue liability expense contra-revenue

liability

Which of the following parties of a distribution channel would have first contact with the product? consumer manufacturer retailer wholesaler

manufacturer

A firm which sells goods that it produces is a: service business merchandising business manufacturing business on-profit business

manufacturing business

After all postings have been made, the total of the schedule of accounts receivable should equal: the balance of the Accounts Receivable account in the general ledger. the total of Cash in the general ledger. the total of all sales on account for the accounting period. the total amount collected during the accounting period.

the balance of the Accounts Receivable account in the general ledger.

A company that buys $5,000 of goods from a wholesaler offering trade discounts of 20 and 10 percent will pay what amount for the goods? $2,200 $3,500 $3,475 $3,600

$3,600

On April 1, Olympic Company made a sale of $500 on account with terms of 2/10, n/30 to Mendocino, Inc. Mendocino, Inc., returned $100 of product as defective on April 3. On April 9, Mendocino, Inc., paid the amount due, less the cash discount. What was the amount of payment made? $392 $408 $592 $490

$392

A wholesale business offers a trade discount of 35 percent on a list price of $7,200. At what amount should the wholesale business record the sale? $4,680 $7,200 $2,520 $9,720

$4,680

Sedona Company had sales of $100,000, sales returns and allowances of $4,000, and sales discounts of $500. What are net sales? $103,500 $95,500 $104,500 $96,500

$95,500

If an invoice lists "2/10, n/30," which of the following sales discounts is being offered to the buyer? 2% 10% 20% 30%

2%

A schedule of accounts receivable prepared at the end of the month should: match, in total, the balance of the Accounts Receivable account in the general ledger. match, in total, the balance of the Sales account in the general ledger. match, in total, the balance of the Sales account in the general ledger less the balance of the Sales Discounts account in the general ledger. match, in total, the balance of the Accounts Receivable account in the general ledger less the balance of the Sales Discounts account in the general ledger.

match, in total, the balance of the Accounts Receivable account in the general ledger.

Which of the following accounts is credited when recording the portion of sales tax that the state government permits a retailer to keep? sales turns and allowances cash sales tax payable miscellaneous income

miscellaneous income

Types of business operations are: service, merchandising, corporation sole proprietorship, merchandising, manufacturing. service, merchandising, manufacturing. service, merchandising, manufacturing, corporation.

service, merchandising, manufacturing.