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Exam 9: Sales and Cash Receipts

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Question 21

Multiple Choice

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The normal balance of the Sales Returns and Allowances account is:

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

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Question 22

Multiple Choice

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H.R. Camping sold goods for $200 to a charge customer. The customer returned for credit $100 worth of goods. Which entry is required to record the return transaction?

A) Debit Sales Returns and Allowances $100 credit Accounts Receivable $100
B) Debit Sales Returns and Allowances $100; credit Sales $100
C) Debit Sales $100; credit Sales Returns and Allowances $100
D) Debit Accounts Receivable $100; credit Sales Returns and Allowances $100

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Question 23

Multiple Choice

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Sold merchandise on account would be recorded with:

Mel's Art studio was moving and sold furniture that was no longer needed for cash. The entry would include:

Sales Returns and Allowances is a contra-revenue account with a normal debit balance.

Santa Materials sold goods for $3,200 plus 5% sales tax to a charge customer, terms n/30. Which entry is required to record this transaction?

The accounts receivable subsidiary ledger shows the amount collected from each customer.

Accounts in the accounts receivable subsidiary ledger are listed alphabetically.

A characteristic of a schedule of accounts receivable is that:

The accounts receivable subsidiary ledger:

Prepare the necessary general journal entry for December 16. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

When a customer returns defective office supplies, the Sales Returns and Allowances account will be debited.

Gross sales equals:

Credit terms of 3/15, n/30 mean that:

The Milk Co. 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. Terms of sale were n/30. April 13 Sold merchandise priced at $600 to James Ellsworth on account. April 14 Sold merchandise priced at $325 to a cash customer. April 15 Sold merchandise priced at $175 to Dana Carter on account. April 16 Sold merchandise priced at $700 to a cash customer. April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund. April 25 Received full payment from Dana Carter. April 30 Paid the amount of sales tax to the state. -Prepare the necessary general journal entry for April 20. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

Prepare the necessary general journal entry for December 10. __________________________________________ __________ __________ __________________________________________ __________ __________ __________________________________________ __________ __________

The contra-revenue accounts include:

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. -

The discount period is longer than the credit period.

Merchandise is: