ACC Ch 7 Questions

Glasser Corp. provided $20,000 of services on account. The account that should be credited is __________ __________.

service revenue

income tax receivable is a __________ receivable a. nontrade b. trade

a. nontrade

Net revenues is calculated as sales minus which of the following? (3) a. sales discounts b. sales allowances c. allowance for uncollectible accounts d. sales returns e. accounts receivable

a. sales discounts b. sales allowances d. sales returns

what type of payment terms tend to increase sales and profitability in the long-run? a. sales on account b. cash only sales

a. sales on account

when a customer returns a product for a refund, in which account is the entry recorded? a. sales return b. purchase discount c. sales discount d. purchase return

a. sales return

The list price on Boyton's catalog indicated that product A sells for $3,000, with a trade discount of 5%. Boyton sells the goods to a customer who qualifies for the trade discount. At what amount should Boyton record the sale and related account receivable a. $3,150 b. $2,850 c. $3,000

b. $2,850

the sales returns and allowances account is classified as a a. contra asset account b. contra revenue account c. contra equity account d. contra liability account

b. contra revenue account

an informal credit arrangement with a customer for payment within 30 to 60 days after the sale is classified as a(n) a. note payable b. nontrade receivable c. account receivable d. prepaid receivable

c. account receivable

Claire provides 4100 of services to customers on account with terms 2/10, n/30. The service revenue account is credited for $100. If the customer pays within 10 days, Claire will record which of the following? (3) a. Debit cash $98 b. Debit sales discount $2 c. Credit cash $100 d. Credit accounts receivable $100 e. Debit cash $100

a. Debit cash $98 b. Debit sales discount $2 d. Credit accounts receivable $100

a trade discount is a. a percentage reduction from list price b. a percentage reduction of the amount due for early payment c. a rebate from the manufacturer d. an increase in the account receivable

a. a percentage reduction from list price

Kim Corporation provides services at the gross amount and uses a discount account to account for the discounts taken by customers. Kim provides services on account for $5,000 with terms 2/10, n/30. Recording this transaction will include a a. credit to accounts receivable, $4,900 b. debit to accounts receivable, $5,000 c. credit to service revenue, $4,900 d. debit to service revenue, $5,000

b. debit to accounts receivable, $5,000

Gammy Corporation provides services with a normal price of $800,000 and a trade discount of $100,000. Terms are 2/10, n/30 and the customers pay within 10 days. The net service revenue is a. $700,000 b. $630,000 c. $882,000 d. 686,000

d. 686,000

Bell provides $500 of services to customers on account with terms 3/10, n/30. The service revenue account is credited for $500. If the customer pays within 10 days, Bell will record which of the following? a. Debit service revenue $500 b. Credit sales discount $50 c. Credit cash $500 d. Debit sales account $15

d. Debit sales account $15

Flounder Corp. sold $12,000 of goods on account. The entry to record this transaction would include a debit to a. retained earnings b. accounts payable c. sales d. accounts receivable

d. accounts receivable

A company's claims to the future collection of cash, other assets, or services is called a __________. a. payable b. transaction c. guarantee d. receivable

d. receivable

total revenues less discounts, returns, and allowances are referred to as __________ revenues

net

the sales discount account is a contra __________ account

revenue

A cash discount representing a reduction in the amount to be paid by a credit customer if the customers pay within a specified period of time is also referred to as a __________ discount

sales

a company makes a sale on term 2/10, n/30. What does this mean?

the customer may take a 2% discount off the price if paid within 10 days and if the discount is not taken in 10 days, the net amount is due in 30 days

which of the following are classified as receivables (2)? a. interest due from loans to customers b. loans by a company to other entities c. trading securities d. inventory purchased on account

a. interest due from loans to customers b. loans by a company to other entities

Paredes records sales at the gross amount and uses a sales discount account to account fro the discounts taken by customers. Paredes provides services on account for $1,000 with terms 2/10, n/30. The entry to record this transaction will include a a. credit to service revenue, $1,000 b. credit to accounts receivable, $980 c. credit to accounts receivable, $1,000 d. credit to service revenue, $980

a. credit to service revenue, $1,000

Warner Corp. sells goods on account for $10,000 on April 2. On April 20, the customer returns $3,000 of the merchandise. The customer has not yet paid for any of the goods. What is the entry Warner will make on April 20 when the goods are returned? a. debit sales returns; credit accounts receivable b. debit sales returns; credit allowance for uncollectible accounts c. debit accounts receivable; credit allowance for sales returns d. debit bad debt expense; credit accounts receivable

a. debit sales returns; credit accounts receivable

for a typical credit sale, the revenue recognition criteria is usually satisfied a. at the point of delivery b. when all expenses are estimated c. when cash is collected d. when the contract is signed

a. at the point of delivery