Accounting Chapter 10
For the merchant, bank credit card sales are treated in a manner similar to a.installment sales. b.cash sales. c.sales on account. d.layaway sales.
b.cash sales.
The source document of a sales transaction is called a a.purchase receipt. b.sales ticket. c.sales return. d.purchase order
b.sales ticket.
A business that purchases clothing, furniture, computers, or other products to sell to other businesses is a a.retail business. b.wholesale business. c.service business. d.not-for-profit business. Feedback
b.wholesale business.
A summary accounts receivable account is called a(n) a.lead account. b.balance account. c.controlling account. d.master account
c.controlling account.
A schedule of accounts receivable is prepared to a.keep track of all the company's customers. b.send to all customers at the end of the month. c.verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance. d.prove that the general ledger and accounts receivable ledger were posted at the same time.
c.verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance.
Which of the following accounts is NOT used to account for merchandise sales transactions? a.Sales Tax Payable b.Sales Returns and Allowances c.Sales d.Accounts Payable
d.Accounts Payable
A credit memorandum for $156 (sales price of merchandise, $150; sales tax $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly, a.Accounts Receivable would not be credited. b.Accounts Receivable would be credited for $6. c.Accounts Receivable would be credited for $150. d.Accounts Receivable would be credited for $156.
d.Accounts Receivable would be credited for $156.
If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n) a.return memorandum. b.allowance memorandum. c.debit memorandum. If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n) a.return memorandum. b.allowance memorandum. c.debit memorandum. d.credit memorandum.
d.credit memorandum.
Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise are called merchandise sales. True or False
False
To verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance, a schedule of accounts payable is prepared. True or False
False
After all posting to the general ledger is completed, the accounts receivable, sales tax payable, and sales accounts in the general ledger are up to date. True or False
True
If the amount of sales returns and allowances is large in proportion to gross sales, a weakness in the merchandising operations is indicated and the trouble should be determined and corrected. True or False
True
Merchandise returned by the customer for a refund is called a sales return. True or False
True
The amounts for sales returns and allowances, sales discounts, and net sales added together equal gross sales. True or False
True
The sales account is credited for the selling price of merchandise sold during the period. True or False
True
To a seller, cash discounts are considered the same as sales discounts. True or False
True
To encourage customers who purchase merchandise on account to pay promptly, a cash discount is usually offered. True or False
True
The account that would be credited for the amount of tax collected and paid on sales would be a.Sales Tax Payable. b.Sales. c.Cash. d.Accounts Payable.
a.Sales Tax Payable.
A credit memorandum for $156 (sale price of merchandise $150; sales tax of $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly, a.Sales would not be debited. b.Sales would be debited for $150. c.Sales would be debited for $156. d.Sales would be debited for $6.
a.Sales would not be debited.
A credit memo states the amount of a sales allowance or return. True or False
True