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Exam 9: Sales and Cash Receipts

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Question 31

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The side that increases the balance of the Sales Discount account is:

A) a credit.
B) a debit.
C) zero.
D) It does not have a normal balance.

E) All of the above
F) B) and D)

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Question 32

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Determine the amount of cash collected at the time of making a sale of $1,000 worth of merchandise subject to a 3% sales tax. $ ________

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Question 33

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The Bixby Co.had the following transactions involving the purchase of merchandise.Prepare the necessary general journal entries.Any applicable freight costs are prepaid by the seller.The perpetual inventory method is in use. -Merchants who buy goods from wholesalers for resale to customers are:

The arrangements between buyer and seller as to when payments for merchandise are to be made are called:

Net Sales equals Gross Sales - Sales Returns and Allowances - Accounts Receivable.

Mike returned $200 of merchandise to Secret Trails.His original purchase was Mike 400,with terms 1/10,n/30.If Justin pays the balance of his account after the discount period,how much should he pay?

Plymouth Sharks Hockey Accessories had the following transactions involving the sale of merchandise.You are to prepare the necessary general journal entries.All sales are subject to a 6% sales tax and have a 2/10,n/30 discount terms. December 2 $\quad$ Sold merchandise priced at $\$ 100$ to Cathy Norton on account. December 4 $\quad$ Sold merchandise priced at $\$ 125$ to a cash customer. Decem ber 10 $\quad$ Payment from Cathy Norton received. Decem ber 16 $\quad$ Cash customer returned $\$ 40$ worth of merchandise. -The following are transactions for Brian for the month of October.Indicate how the following transactions would be recorded by completing the necessary journal entries as appropriate (omit explanations).Also post to the subsidiary general and subsidiary ledgers. Oct.1 Brian invested $15,000 in his business. Oct.3 Sold $2,500 of merchandise on account to H.Holand,sales invoice No.1,terms 1/10,n/30. Oct.5 Sold $1,200 of merchandise on account to T.Traer,sales invoice No.2,terms 1/10,n/30. Oct.13 Received cash from H.Holand in payment for October 3 transaction,less the discount. Oct.14 Issued credit memorandum No.1 to T.Traer for $100 for merchandise returned from October 5 sale on account. Oct.15 Received cash from T.Traer for the amount due,less the discount.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Shop Supplies } & & & \\\hline\end{array}$

Received payment,within the discount period,for merchandise sold previously.This will be recorded with:

Betsy's pottery sold 200 tiles at $25.00 each to a charge customer,terms 1/10,n/30.Which entry is required to record this transaction?

Compare and discuss a discount period versus a credit period.

The contra-revenue accounts include:

If a credit memorandum is issued,what account will be increased on the seller's books?

Sue's Jewelry sold 30 necklaces for $25 each to a credit customer.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the payment after the discount period would include:

Explain why the account Sales Tax Payable is credited when a sale is made subject to a sales tax?

If cash flow is so important to merchandisers,why do they extend credit to their customers?

Sold Merchandise for Cash subject to a sales tax accepting cash.This will be recorded with:

An example of a subsidiary ledger is the revenue ledger.

Plymouth Sharks Hockey Accessories had the following transactions involving the sale of merchandise.You are to prepare the necessary general journal entries.All sales are subject to a 6% sales tax and have a 2/10,n/30 discount terms. December 2 $\quad$ Sold merchandise priced at $\$ 100$ to Cathy Norton on account. December 4 $\quad$ Sold merchandise priced at $\$ 125$ to a cash customer. Decem ber 10 $\quad$ Payment from Cathy Norton received. Decem ber 16 $\quad$ Cash customer returned $\$ 40$ worth of merchandise. -Prepare the necessary general journal entry for April 25. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

Accounts in the accounts receivable subsidiary ledger are listed alphabetically.