Accounting Chapter 10
cash receipts journal
A special journal used to record only cash receipt transactions.
sales journal
A special journal used to record only sales of merchandise on account.
sales discount
A cash discount on sales taken by a customer.
point-of-sale terminal
A computer used to collect, store, and report all the information of a sales transaction.
credit memorandum
A form prepared by the vendor showing the amount deducted for returns and allowances.
batch report
A report of credit card sales produced by a point-of-sale terminal.
credit card sale
A sale in which a credit card is used for the total amount of the sale at the time of the transaction.
false
All sales of merchandise are recorded in a sales journal.
false
Because Sales Discount is a contra account to Sales, it has a normal credit balance.
sales allowance
Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vender accounts payable.
b
Credit terms of 2/10,n/30 mean that if the account is paid in a. 2 days, a 10% discount will be allowed. b. 10 days, a 2% discount will be allowed. c. 10 days, a 30% discount will be allowed. d. 30 days, a 2% discount will be allowed.
true
Even though a company offers a sales discount, the customer is invoiced for the full sales amount plus sales tax on that amount.
a
For a sale on account of $1,000.00 plus sales tax of $80.00, the amount recored in the Accounts Receivable amount column of a sales journal is a. $1,080.00 b. $1,000.00 c. $920.00 d. $80.00
true
For weekly cash and credit card sales, the asset account Cash is debited for the total of sales and sales tax, but the revenue account Sales is credited only of the total of sales.
c
Recording revenue from transactions at the time goods or services are sold is an application of the accounting concept a. Matching Expenses with Revenue b. Objective Evidence c. Realization of Revenue d. Business Entity
false
Regardless of when merchandise is sold, revenue should be recorded when cash is received.
d
Sales Returns and Allowances is a. an expense account. b. a revenue account. c. a contra expense account. d. a contra revenue account.
true
Sales for cash and credit cards are recorded as a single case sales transaction.
false
The amount of sales tax collected is an asset of the business until paid to the state government.
c
The amount of cash received for a sale on account of $1,000.00 plus sales tax of $80.00 when the cash is received within the 2 percent discount period is a. $1,080.00 b. $1,062.00 c. $1,058.40 d. $1,053.60
b
The amount of sales tax on a sale is calculated as the price of goods a. plus the sales tax rate. b times the sales tax rate. c. minus the sales tax rate. d. divided by the sales tax rate.
batching out
The process of preparing a batch report of credit card sales from a point-of-sale terminal.
terminal summary
The report that summarizes the cash and credit card sales of a point-of-sale terminal.
b
Using a terminal summary as a source document for weekly cash and credit card sales is an application of the accounting concept a. Matching Expenses with Revenue b. Objective Evidence c. Realization of Revenue d. Business Entity
true
When cash is proved, it must always equal the amount on the next unused check stub.
false
When cast is received for a sale in account within the discount period, the amount credited to Accounts Receivable is reduced by the amount of the discount.
b
When merchandise is sold on account and sales tax is also collected, a. Accounts Receivable is credited of the total sale and sales tax. b. the accounts receivable account balance is increased c. Sales is debited for the price of the goods. d. the sales tax is not reported.
