Question 1

When a business makes a sale on a bank credit card, the business is responsible for collecting from the customer.

Accepted Answer

A) True 
 B)False

Question 2

The Sales Returns and Allowances account is presented

Accepted Answer

A)   on the balance sheet as a deduction from Accounts Receivable.
B)   on the income statement as a deduction from Sales.
C)   on the income statement as an addition to Sales.
D)   on the balance sheet as a deduction from Capital.E) C) and D)
F) B) and C)

Question 3

If a firm does not have a sales returns and allowances journal, the entries for these transactions are made in

Accepted Answer

A)   the sales journal.
B)   the general journal.
C)   the cash receipts journal.
D)   the cash payments journal.E) C) and D)
F) All of the above

Question 4

In a firm that uses special journals, the sale of merchandise for cash is recorded in the

Accepted Answer

A)   cash payments journal.
B)   cash receipts journal.
C)   sales journal.
D)   purchases journal.E) All of the above
F) A) and B)

Question 5

Kay Sadia sold merchandise for $8,750 subject to a 6% sales tax. The entry in the sales journal will include a debit to Accounts Receivable for

Accepted Answer

A)   $9,275.00
B)   $8,225.00
C)   $8,750.00
D)   $8,462.00E) A) and B)
F) C) and D)

Question 6

The Sales Returns and Allowances account has a normal ____________________ balance.

Accepted Answer

The answer of The Sales Returns and Allowances account has...

Question 7

The abbreviation S1 in the Posting Reference column of an account shows that the data was posted from page 1 of the sales journal.

Accepted Answer

A) True 
 B)False

Question 8

A(n) ____________________ business sells goods that it purchases in finished form for resale.

Accepted Answer

The answer of A(n) ____________________ business sells goods that it...

Question 9

Which of the following statements is correct?

Accepted Answer

A)   The sales journal is used for recording both cash sales and credit sales.
B)   Since the sales journal is used for a single purpose, there is no need to enter any descriptions.
C)   To provide an adequate audit trail, sales on credit should be recorded in both the sales journal and the general journal.
D)   The complete information for each sale of merchandise on credit can be recorded on one line of the cash receipts journal.E) B) and C)
F) B) and D)

Question 10

For a retailer, bank credit card sales are like cash sales.

Accepted Answer

A) True 
 B)False

Question 11

Selected balances from the general ledger of the Valley Video Rentals on May 31, 2013, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended May 31, 2013.

Accepted Answer

The answer of Selected balances from the general ledger of...

Question 12

In some states, a firm receives a discount for paying the amount of sales tax due on time.

Accepted Answer

A) True 
 B)False

Question 13

In a firm that uses special journals, the acceptance of a return of merchandise from a credit customer is recorded in the

Accepted Answer

A)   cash receipts journal.
B)   sales journal.
C)   cash payments journal.
D)   general journal.E) A) and D)
F) B) and C)

Question 14

A merchandising business sells goods that it produces.

Accepted Answer

A) True 
 B)False

Question 15

Selected balances from the general ledger of the All Star Video Rentals on July 31, 2013, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended July 31, 2013.

Accepted Answer

The answer of Selected balances from the general ledger of...

Question 16

On the Income Statement, Sales Returns and Allowances have the effect of

Accepted Answer

A)   Increasing total revenue
B)   Increasing total expenses
C)   Decreasing total revenue
D)   Decreasing total expensesE) None of the above
F) A) and B)

Question 17

Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:

Accepted Answer

A)   Debit Accounts Payable
B)   Credit to Purchase Returns and Allowances
C)   Debit to Account Receivable
D)   Debit Sales Returns and AllowancesE) A) and D)
F) None of the above

Question 18

The Sales Returns and Allowances account has a normal debit balance.

Accepted Answer

A) True 
 B)False

Question 19

In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the

Accepted Answer

A)   cash payments journal.
B)   cash receipts journal.
C)   purchases journal.
D)   general journal.E) A) and B)
F) A) and C)

Question 20

The sales journal for Carothers Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

Accepted Answer

Dr. Accounts Receiva...

Exam 7: Accounting for Sales and Accounts Receivable

The Sales Returns and Allowances account has a normal debit balance.

Correct AnswerverifiedShow Answer

If a firm does not have a sales returns and allowances journal, the entries for these transactions are made in

Correct AnswerverifiedShow Answer

Selected balances from the general ledger of the Valley Video Rentals on May 31, 2013, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended May 31, 2013.

Correct AnswerverifiedShow Answer

On the Income Statement, Sales Returns and Allowances have the effect of

Correct AnswerverifiedShow Answer

Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:

Correct AnswerverifiedShow Answer

For a retailer, bank credit card sales are like cash sales.

Correct AnswerverifiedShow Answer

When a business makes a sale on a bank credit card, the business is responsible for collecting from the customer.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the

Correct AnswerverifiedShow Answer

A(n) ____________________ business sells goods that it purchases in finished form for resale.

Correct AnswerverifiedShow Answer

In a firm that uses special journals, the sale of merchandise for cash is recorded in the

Correct AnswerverifiedShow Answer

In a firm that uses special journals, the acceptance of a return of merchandise from a credit customer is recorded in the

Correct AnswerverifiedShow Answer

Kay Sadia sold merchandise for $8,750 subject to a 6% sales tax. The entry in the sales journal will include a debit to Accounts Receivable for

Correct AnswerverifiedShow Answer

A merchandising business sells goods that it produces.

Correct AnswerverifiedShow Answer

In some states, a firm receives a discount for paying the amount of sales tax due on time.

Correct AnswerverifiedShow Answer

Selected balances from the general ledger of the All Star Video Rentals on July 31, 2013, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended July 31, 2013.

Correct AnswerverifiedShow Answer

The Sales Returns and Allowances account is presented

Correct AnswerverifiedShow Answer

The sales journal for Carothers Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

Correct AnswerverifiedDr. Accounts Receiva...View AnswerShow Answer

The Sales Returns and Allowances account has a normal ____________________ balance.

Correct AnswerverifiedShow Answer

The abbreviation S1 in the Posting Reference column of an account shows that the data was posted from page 1 of the sales journal.

Correct AnswerverifiedShow Answer

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Dr. Accounts Receiva...
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