04 - SB: Merchandise Sales ( 18 - 27 mins)Assignment

Sales is a(n) ______ account. Multiple choice question. 1. expense 2. liability 3. revenue 4. asset

3. revenue

Sales Discounts is a ______ account. Multiple choice question. 1. expense 2. asset 3. revenue 4. contra-asset 5. contra-revenue

5. contra-revenue

What is a sales return? Multiple choice question. 1. A sales return refers to merchandise that customers return to the seller after a sale. 2. A sales return is designed to shorten the payment period between the buyer and the seller. 3. A sales return is the cash discount given for early payment of an invoice. 4. A sales return refers to merchandise a seller acquires, but then returns to the buyer.

1. A sales return refers to merchandise that customers return to the seller after a sale.

A journal entry for a sale of merchandise on credit will result in all of the following: (Check all that apply). Multiple select question. 1. Credit to Merchandise Inventory 2. Debit to Sales 3. Credit to Sales 4. Debit to Cost of Goods Sold 5. Credit to Cost of Goods Sold 6. Debit to Accounts Receivable

1. Credit to Merchandise Inventory 3. Credit to Sales 4. Debit to Cost of Goods Sold 6. Debit to Accounts Receivable

A journal entry for a sale of merchandise on credit will result in all of the following: (Check all that apply). Multiple select question. 1. Debit to Accounts Receivable 2. Debit to Sales 3. Credit to Merchandise Inventory 4. Credit to Sales 5. Debit to Cost of Goods Sold 6. Credit to Cost of Goods Sold

1. Debit to Accounts Receivable 3. Credit to Merchandise Inventory 4. Credit to Sales 5. Debit to Cost of Goods Sold

On Jan 5, a customer returned merchandise that had been purchased earlier on credit. The original sale was for $500, and the cost to the seller was $150. The seller uses the perpetual inventory system. Demonstrate the required journal entry to record the return on the books of the seller, assuming the goods can be sold to another customer. Multiple choice question. 1. Debit Accounts Receivable $500; credit Sales Returns and Allowances $500; credit Merchandise inventory $150; and credit Cost of Goods Sold $150. 2. Debit Sales Returns and Allowances $500; debit Merchandise Inventory $150; credit Accounts Receivable $500; and credit Cost of Goods Sold $150. 3. Debit Accounts Receivable $500 and credit Cash $500. 4. Debit Sales Returns and Allowances $150; credit Accounts Receivable $150.

2. Debit Sales Returns and Allowances $500; debit Merchandise Inventory $150; credit Accounts Receivable $500; and credit Cost of Goods Sold $150.

Explain how to determine gross profit on an income statement by selecting the correct statement below. Multiple choice question. 1. Cost of goods sold is added to net sales. 2. Sales is subtracted from cost of goods sold. 3. Cost of goods sold is added to sales discounts. 4. Cost of goods sold is subtracted from net sales.

4. Cost of goods sold is subtracted from net sales.

X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise on credit. The original cost of the merchandise to X-Mart was $500. Demonstrate the required journal entry to record the sale and the cost of the sale by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Credit Accounts Receivable $1,400. 2. Debit Merchandise Inventory $500. 3. Credit Cost of Goods Sold $500. 4. Debit Sales $1,400. 5. Debit Cost of Goods Sold $500. 6. Credit Merchandise Inventory $500. 7. Debit Accounts Receivable $1,400. 8. Credit Sales $1,400.

5. Debit Cost of Goods Sold $500. 6. Credit Merchandise Inventory $500. 7. Debit Accounts Receivable $1,400. 8. Credit Sales $1,400.

A sales return refers to merchandise that ________ (customers/sellers/creditors) return to the ________ (customer/seller/creditor) after a sale for a refund of the purchase price or reduction in the amount owed.

Blank 1: customers Blank 2: seller

Sales Discounts is a contra- __________ (expense/revenue/asset) account and is increased with a _________ (debit/credit).

Blank 1: revenue Blank 2: debit

A sales ________ discount benefits a seller through earlier cash receipts and reduced collection efforts.

Blank 1: sales or cash

Explain what a credit memorandum is by completing the following sentence. When a seller grants an allowance on a previous sale, the ________ (customer/creditor/seller) issues a credit memorandum to inform the _______ (customer/seller) of a credit made to the buyer's Account Receivable in the seller's records.

Blank 1: seller Blank 2: customer

Explain what a credit memorandum is by completing the following sentence. When a seller grants an allowance on a previous sale, the __________ (customer/creditor/seller) issues a credit memorandum to inform the _________ (customer/seller) of a credit made to the buyer's Account Receivable in the seller's records.

Blank 1: seller Blank 2: customer

Jan's Jams makes a credit sale for $300 with terms of 2/10,n/30. The cost of the merchandise is $200. The required journal entry to record the sale and the cost of the sale is: Multiple choice question. 1. debit Accounts Receivable $300; credit Sales $300; debit Cost of Goods Sold $200; and credit Merchandise Inventory $200 debit Accounts Payable $300; and credit Sales $300 2. Debit Accounts Receivable and credit Sales for $300; debit Cost of Goods Sold and credit Merchandise Inventory for $200. debit Sales $300 and credit Cost of Goods Sold $300 3. Debit Accounts Receivable and credit Sales for $300; debit Cost of Goods Sold and credit Merchandise Inventory for $200. debit Accounts Receivable $200; credit Sales $200; debit Cost of Goods Sold $300; and credit Merchandise Inventory $300 4. Debit Accounts Receivable and credit Sales for $300; debit Cost of Goods Sold and credit Merchandise Inventory for $200.

Debit Accounts Receivable $300; credit Sales $300; debit Cost of Goods Sold $200; and credit Merchandise Inventory $200

On July 5, Jo's Market sold $1,000 of goods on credit with terms of 2/10,n/30. The required journal entry to record Jo's Market customer's payment on August 6 would be: Multiple choice question. 1. debit Accounts Receivable $1,000; credit Sales Discounts $20; and credit Cash $980 2. debit Cash $1,000; credit Accounts Receivable $1,000 3. debit Accounts Receivable $1,000; credit Cash $1,000 4. debit Cash $980; debit Sales Discounts $20; and credit Accounts Receivable $1,000

debit Cash $1,000; credit Accounts Receivable $1,000

What is Contra Revenue?

is a deduction from the gross revenue reported by a business, which results in net revenue.

Gross profit is computed as net _______ minus cost of goods sold.

sales

X-Mart uses the perpetual inventory system to account for its merchandise. On June 1, it sold $7,000 of merchandise for cash. The original cost of the merchandise to X-Mart was $500. Demonstrate the required journal entry to record the sale and the cost of the sale by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Credit Sales $7,000. 2. Credit Merchandise Inventory $500. 3. Debit Cash $7,000. 4. Debit Cost of Goods Sold $500. 5. Credit Cost of Goods Sold $500. 6. Credit Cash $7,000. 7. Debit Merchandise Inventory $500. 8. Debit Sales $7,000.

1. Credit Sales $7,000. 2. Credit Merchandise Inventory $500. 3. Debit Cash $7,000. 4. Debit Cost of Goods Sold $500.

X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise on credit with terms of 1/10,n/40. Demonstrate the required journal entry to record the receipt of payment on May 25 by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Debit Cash $1,400. 2. Credit Sales Discounts $14. 3. Credit Accounts Receivable $1,400. 4. Debit Sales Discounts $14. 5. Debit Accounts Receivable $1,400. 6. Credit Cash $1,400.

1. Debit Cash $1,400. 3. Credit Accounts Receivable $1,400.

Sally Beauty Warehouse uses the perpetual inventory system to account for its merchandise. On Nov 2, it sold $700 of merchandise on credit with terms of 2/15,n/30. Demonstrate the required journal entry to record the receipt of payment from the customer on Nov 13, by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Debit Cash $686. 2. Credit Accounts Receivable $700. 3. Debit Cash $700. 4. Debit Accounts Receivable $700. 5. Credit Sales Discounts $14. 6. Debit Sales Discounts $14.

1. Debit Cash $686. 2. Credit Accounts Receivable $700. 6. Debit Sales Discounts $14.

On June 5, Jo's Market sold $1,000 of goods on credit with terms of 2/10,n/30. How will Jo's Market record the customer's payment on June 8? Multiple choice question. 1. Debit Cash $980; debit Sales Discounts $20; and credit Accounts Receivable $1,000 2. Credit Accounts Receivable $1,000; debit Cash $980; and credit Merchandise Inventory $20 3. Debit Accounts Receivable $1,000; credit Merchandise Inventory $20; and credit Cash $980 4. Debit Cash $1,000 and credit Accounts Receivable $1,000

1. Debit Cash $980; debit Sales Discounts $20; and credit Accounts Receivable $1,000

Dogs R US uses the perpetual inventory system to account for its merchandise. A customer returned merchandise. Assuming that the purchase was originally bought on credit for $400 with a cost to Dogs R US of $100, demonstrate required journal entry of Dogs R US to record the return by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Debit Sales Returns and Allowances $400. 2. Debit Merchandise Inventory $100. 3. Debit Accounts Payable $400. 4. Debit Cost of Goods Sold $100. 5. Credit Accounts Receivable $400. 6. Credit Cash $400. 7. Credit Cost of Goods Sold $100. 8. Credit Sales Returns and Allowances $400. 9. Credit Merchandise Inventory $100.

1. Debit Sales Returns and Allowances $400. 2. Debit Merchandise Inventory $100. 5. Credit Accounts Receivable $400. 7. Credit Cost of Goods Sold $100.

Which of the statements below summarize why a seller would give a sales allowance? (Check all that apply.) Multiple select question. 1. Sold merchandise was defective or unacceptable. 2. The seller wants to keep a customer happy. 3. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price. 4. The seller wants to avoid future lost sales. 5. The buyer purchased a large amount of merchandise and was eligible for a reduced purchase price. 6. The buyer could not pay within the discount period.

1. Sold merchandise was defective or unacceptable. 2. The seller wants to keep a customer happy. 3. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price. 4. The seller wants to avoid future lost sales.

Sales is a(n) ________ (expense/revenue/asset) account and is reported on the ________ (income/balance) ________ (statement/sheet).

1: revenue 2: Income 3: Statement

X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise on credit. The original cost of the merchandise to X-Mart was $500. Demonstrate the required journal entry to record the cost of the sale by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Debit Merchandise Inventory $500. 2. Debit Cost of Goods Sold $500. 3. Credit Merchandise Inventory $500. 4. Credit Cost of Goods Sold $500.

2. Debit Cost of Goods Sold $500. 3. Credit Merchandise Inventory $500.

A sales allowance can be described as: Multiple choice question. 1. a discount given by the seller of merchandise for early payment the implied interest paid when not taking advantage of a sales discount 2. a reduction in the selling price of defective or unacceptable merchandise sold to customers 3. the reduction in the sales price of an item because of the quantity purchased

2. a reduction in the selling price of defective or unacceptable merchandise sold to customers

Jo's Market makes a credit sale for $1,000 with terms of 2/10,n/30. The cost of the merchandise is $400. The required journal entry to record the sale and cost of the sale is: Multiple choice question. 1. debit Accounts Receivable $600; credit Sales $600; debit Cost of Goods Sold $400; and credit Merchandise Inventory $400 Sold and credit Merchandise Inventory for $400. 2. debit Accounts Receivable $1,000; credit Sales $1,000; debit Cost of Goods Sold $400; and credit Merchandise Inventory $400 3. debit Accounts Payable $1,000; and credit Sales $1,000 Goods Sold and credit Merchandise Inventory for $400. debit Accounts Receivable $1,000 and credit Sales 1,000 4. Debit Accounts Receivable and credit Sales for $1,000; debit Cost of Goods Sold and credit Merchandise Inventory for $400.

2. debit Accounts Receivable $1,000; credit Sales $1,000; debit Cost of Goods Sold $400; and credit Merchandise Inventory $400

X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise for cash. The original cost of the merchandise to X-Mart was $500. Demonstrate the required journal entry to record the sale and the cost of the sale by selecting all of the correct actions below. (Check all that apply.) Multiple select question. 1. Credit Accounts Receivable $1,400. 2. Debit Merchandise Inventory $500. 3. Debit Sales $1,400. 4. Debit Cash $1,400. 5. Credit Sales $1,400. 6. Credit Merchandise Inventory $500. 7. Debit Cost of Goods Sold $500. 8. Credit Cost of Goods Sold $500.

4. Debit Cash $1,400. 5. Credit Sales $1,400. 6. Credit Merchandise Inventory $500. 7. Debit Cost of Goods Sold $500.

Review the statements below and select the one that explains the purpose of a sales discount. Multiple choice question. 1. They increase the credit period allowed to customers. 2. They decrease the credit period allowed to customers. 3. They increase the time that the customer has to make payment. 4. They decrease the time that the seller has to wait for payment. 5. They increase the amount of money collected by the seller.

4. They decrease the time that the seller has to wait for payment.