For the merchant, bank credit
card sales are treated in a manner similar to
Student Answer:
sales on account.
cash sales.
installment sales.
layaway sales.
Question 2.
Question :
Merchandise returned by the
customer for a refund is called a sales return.
Student Answer:
True
False
Question 3.
Question :
When a business uses a
subsidiary accounts receivable ledger, there is no need to keep an accounts
receivable account in the general ledger.
Student Answer:
True
False
Question 4.
Question :
A customer returns merchandise
that was delivered in poor condition and that does not meet specification.
The account that the seller would debit for the amount of the return is
Student Answer:
Sales Returns and Allowances.
Purchase Returns and Allowances.
Sales.
Purchases.
Question 5.
Question :
To enter a cash sale, the
journal entry includes
Student Answer:
debiting Sales, debiting Sales Tax Payable,
and crediting Cash.
debiting Sales Tax Payable, debiting Cash,
and crediting Sales.
debiting Sales, debiting Cash, and crediting
Sales Tax Payable
debiting Cash, crediting Sales, and
crediting Sales Tax Payable.
Question 6.
Question :
A common approach to keeping a
record of each customer's account receivable is to use a subsidiary
accounts receivable ledger.
Student Answer:
True
False
Question 7.
Question :
Special discounts from list
prices, granted by manufacturers to different classes of customers, are
known as
Student Answer:
cash discounts.
trade discounts.
manufacturers' discount.
customers' discounts.
Question 8.
Question :
FOB destination means free on
board at origin of the shipment.
Student Answer:
True
False
Question 9.
Question :
The terms on an invoice are
4/15, n/30. This means that
Student Answer:
a discount of 4% will be allowed if payment
is made within 15 days from the date of the invoice.
a discount of 15% will be allowed if payment
is made with 4 days from the date of the invoice.
a discount of 4% will be allowed if payment
is made by the 15th of the month.
a discount of 15% will be allowed if payment
is made by the 4th day after the date of the invoice.
Question 10.
Question :
Gross profit is a measure of the
amount of sales dollars available to cover expenses after covering the cost
of the goods sold.
Student Answer:
True
False
Question 11.
Question :
Assume the gross amount of an
invoice is $100 and a discount of 20% is allowed. The amount of the trade
discount totals
Student Answer:
$20.
$65.
$40.
$80.
Question 12.
Question :
An invoice in the amount of $916
is subject to a trade discount of 10% and credit terms on 3/10, n/30. If
the invoice is not paid within the discount period, the amount that would
be paid to satisfy the invoice would be
Student Answer:
$824.40.
$888.52.
$981.27.
$916.00.
Question 13.
Question :
A common approach to keeping a
record of each customer's accounts receivable is to use a(n)
Student Answer:
sales journal.
accounts receivable ledger.
general ledger.
controlling account.
Question 14.
Question :
A journal designed for entering
only sales on account is called the
Student Answer:
cash receipts journal.
cash payments journal.
sales journal.
general journal.
Question 15.
Question :
A record used to keep the amount
owed to each supplier is called a(n)
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