Acct:14:Vocab and Content
In a merchandising business, the most frequent type of transaction is the sale of merchandise
True
Prenumbered sale slips help businesses keep track of all sales made on account
True
Retailers include clothing stores, CD's, and tape shops and automobile dealerships.
True
Sales discounts is classified as a contra revenue account.
True
Sales taxes are not usually charged to governmental agencies
True
Sales Returns and Allowances is classified as a
Contra Revenue Account
An account whose balance decreases another account's balance
Contra account
Credit card issued by a bank and honored by many businesses
Bankcard
The amount a customer may deduct if the payment for merchandise is made within a certain time
Cash discount
Accounts Receivable is a________ because its balance must equal the total of the accounts receivable subsidiary ledger.
Controlling account
Decrease Side of Merchandise Inventory
Credit
Decrease Side of Sales Discounts
Credit
Increase Side of Sales Tax Payable
Credit
Increase side of Sales
Credit
Normal Balance Side of Sales
Credit
Normal Balance Side of Sales Tax Payable
Credit
A charge customer is entitled to charge merchandise with
Credit card
Document prepared by the seller granting credit for damaged or returned merchandise
Credit memorandum
Sale set out the time allowed for payment
Credit terms
Decrease Side of Sales
Debit
Decrease Side of Sales Tax Payable
Debit
Increase Side of Merchandising Inventory
Debit
Increase side of Sales Discount
Debit
Normal Balance Side of Merchandise Inventory
Debit
Normal Balance Side of Sale Discounts
Debit
Maintains a list in alphabetical order of the charge customers of a business
Accounts receivable subsidiary ledger
Cash received by a business is referred to as a
Cash receipt
Transaction that occurs when a business receives full payment for the merchandise sold at the time of sale
Cash sale
Customer to whom a sale on account is made
Charge customer
A bankcard holder is a charge customer of the business from whom the purchase is being made
False
A cash discount is an advantage only to the buyer because he or she is able to purchase the merchandise at a reduced cost
False
A cash discount is calculated on the total of a sales slip, including the sales tax
False
A cash discount is recorded at the time the sale is made
False
A sale on account is paid for in cash when the merchandise is sold
False
A sales discount increases the revenue account sales
False
Bank card sales are processed the same way as a store's regular charge card sales
False
Cash discounts increase the amount to be received from charge customers
False
In most states, sales made to school districts and other gov agencies are taxable
False
Merchandising Businesses sell only on a cash and carry bases
False
Sales discounts increases the sales account
False
The most widely used bankcard in North America is American Express
False
Two of the accounts used by merchandising businesses are merchandise inventory and professional fees
False
The items of merchandise a business has in stock
Inventory
Sales Tax Payable is classifies as a?
Liability Account
If the date of an invoice is May 14, the credit terms are 2/10. n30, and the invoice was received on May 16, the last day the discount may be taken is on the?
May 24
The goods a business buys for resale to customers are known as
Merchandise
Form that serves as a record of cash received
Receipt
Business that sells to the final user
Retailer
Wal-Mart is an example of what
Retailer or merchandising business
The revenue account for a merchandising business
Sales
Price reduction granted by a business for damaged goods kept by the customers
Sales allowance
A cash discount issued by the seller
Sales discount
Permits a customer to pay for the merchandise at a later date
Sales on account
Merchandise returned to the seller for full credit
Sales return
A form that lists the details of a sale and is used as a record of the transaction
Sales slip
Many states and some cities require that a business add a_______ or a percentage of the selling price of the goods, at the time of the sale
Sales tax
Book that is summarized in a controlling account in the general ledger
Subsidiary ledger
Electrical supply companies, auto parts distributors, and food supply companies are examples of wholesalers
True
2/10, n/30 means that customers may deduct 2% of the cost of the merchandise if they pay within 10 days otherwise they must pay the full amount within 30 days
True
A proof is usually prepared at the end of each day to show that the amount of cash in the cash register equals the amount of cash sales recorded on the cash register tape.
True
A sales slips is usually prepared in multiple copies with the customer receiving the original and the businesses keep the remaining copies
True
Bankcard sales are recorded like cash sales because a business expects to receive its cash within a few days of the deposit
True
Business are required to act as agents for local and states government in the collection of taxes
True
Customer accounts are listed in alphabetical order in the accounts receivable subsidiary ledger
True
The account Merchandising inventory is classified in the chart of accounts as an asset
True
The cash register tape is the source document for the journal entry to record the day's cash sales
True
When a cash sale occurs, the details of the sales are printed on two tapes and the cash register at the same time.
True
Business that sells to retailers
Wholesaler
