Accounting: Chapter 10 Audit Your Understanding

Which accounts are impacted, and how, by the posting of the special columns of a sales journal?

1. Accounts Receivable is debited 2. Sales is credited 3. Sales Tax Payable is credited

List the five steps for posting transactions to accounts receivable ledger forms.

1. Write the date 2. Write the sales journal page number in the Post. Ref. Column of the ledger account 3. Enter the debit and credit amounts 4. Calculate and record the new account balance 5. Write the customer account number in the Post. Ref. Column of the sales journal

What is the title of the general ledger account used to summarize the total amount due from all charge customers?

Accounts Receivable

How are sales tax rates usually stated?

As a percent of sales.

What column on a general ledger form is not on an accounts receivable ledger form?

Credit balance

How are selling price and markup related?

Markup is the amount added to the cost of merchandise to set the selling price.

Why is sales tax collected considered a liability?

The amount of sales tax collected is a business liability until paid to the government

What is the relationship between the accounts receivable ledger and its controlling account?

The total of the accounts in the accounts receivable subsidiary ledger equals the balance in the controlling account, Accounts Receivable.