accounting- ch.14
false
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 is able to purchase the merchandise at a reduced cost
false
a cash discount is calculated on the total of a sales slip, including sales tax
false
a cash discount is recorded at the time of the sale
sales discount
a cash discount issues by the seller is a(n) __
credit card
a charge customer is entitled to charge merchandise with a(n) __
sales slip
a form that lists the details of a sale and is used as a record of the transaction is a(n) __
sales allowance
a price reduction granted by a business for damaged goods kept by the customer is called a(n) __
false
a sales discount increases the revenue account Sales
true
a sales slip is usually prepared in multiple copies with the customer receiving the original and the business keeping the remaining copies
subsidiary ledger
a(n) __ is a book that is summarized in a controlling account in the general ledger
wholesaler
a(n) __ is a business that sells out to retailers
retailer
a(n) __ is a business that sells to final user
false
bankcard sales are processed the same way as a store's regular charge card sales
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 requires to act as agents for local and state governments in the collection of taxes
false
cash discounts increase the amount to be received from charge customers
true
"a 2/10, n/30" means that customers deduct 2% of the cost of the merchandise if they pay within 10 days. Otherwise they must pay the full amount within 30days.
if merchandise is sold for $325.60 and the sales tax rate is 5%, the amount to be collected from a charge customer is __
- $309.32 - $341.88 - $325.60 - $331.88 Answer: $341.88
if merchandise is sold for $417.80 and the sales tax rate is 4%, the amount of sales tax is __
- $434.51 - $16.17 -$20.89 - none of the above Answer: none of the above
if the date of the invoice is May 14, the credit terms are 2/10, n/30, and the invoice was received May 16, the last date the discount may be taken is __
- May 26 - June 12 - May 24 - May 14 Answer: May 24
controlling account
accounts receivable is a(n) __ because its balance must equal the total of the accounts receivable subsidiary ledger
contra account
an account whose balance decreases another accounts balance is a(n) __
retailer/ merchandising business
an example of a(n) __ is Wal-Mart
sales returns and allowances is classified as a __
contra revenue account
true
customer accounts are listed in alphabetical order in the accounts receivable subsidiary ledger
true
electrical supply companies, auto parts distributors, and food supply companies are wholesalers
true
in a merchandising business, the most frequent type of transaction is the sale of merchandise
false
in most states, slated made to school districts and other governmental agents are taxable
sales tax payable is classified as a(n) __
liability account
sales tax
many states and some cities require that a business add a(n) __, or a percentage of the selling price of the goods at the time of the sale
sales return
merchandise returned to the seller for full credit is a(n) __
true
renumbered sales slips help business keep track of all sales made on account
true
retailers include clothing stores and automobile dealerships
false
sales discounts increase the sales account
true
sales taxes are not usually charged to governmental agencies
accounts receivable subsidiary ledger
the __ maintains a list in alphabetical order of the charge customers of a business
credit terms
the __ of a sale set out the time allowed for payment
true
the account Merchandise Inventory is classified in the chart of accounts as an asset
cash discount
the amount a customer may deduct if the payment for merchandise is made within a certain time is a(n) __
cash receipt
the cash received by a business is referred to as a(n) __
true
the cash register tape is the source document for the journal entry to record the day's cash sales
credit
the decrease side of the Merchandise Inventory account is a __
credit
the decrease side of the Sales Discounts accounts is a __
debit
the decrease side of the Sales Tax Payable account is a __
debit
the decrease side of the Sales account is a __
merchandise
the goods a business buys for resale to customers are known as __
debit
the increase side of the Merchandise Inventory is a __
debit
the increase side of the Sales Discounts account is a
credit
the increase side of the Sales Tax Payable account is a __
credit
the increase side of the Sales account is a
true
the proof is usually prepared at the end of each day to show that the amount in the cash register equals the amount of cash sales recorded on the cash register tape
sales
the revenue account for a merchandising business is __
false
the sale on account is paid for in cash when the merchandise is sold
false
two of the accounts used by merchandising businesses are Merchandise Inventory and Professional Fees
true
when a cash sale occurs, the details of the sale are printed on two tapes in the cash register at the same time
sales on account
a(n) __ permits a customer to pay for the merchandise at a later date
receipt
a(n) __ is a form that serves as a record of cash received
cash sale
a(n) __ is a transaction that occurs when a business receives full payment for the merchandise sold at the time of the sale
true
Sales Discount is classified as a contra revenue account
bankcard
a(n) __ is a credit card issued by a bank that and honored by many businesses
charge customer
a(n) __ is a customer to whom a sale on account is made
credit memorandum
a(n) __ is a document prepared by the seller granting credit for damaged or returned merchandise
false
merchandising businesses sell only on a cash and carry basis
inventory
the items of merchandise a business has in stockade referred to as __
false
the most widely used bankcard in North America is American Express
debit
the normal balance side of the Merchandise Inventory account is a __
debit
the normal balance side of the Sales Discounts accounts is a __
credit
the normal balance side of the Sales Tax Payable account is a __
credit
the normal balance side of the Sales accounts is a __