11) Net sales equal:

A) gross sales.

B) gross sales – sales returns and allowances.

C) gross sales – sales returns and allowances – sales discounts.

D) sales discounts.

 

12) Sales Tax Payable is a:

A) liability account with a debit balance.

B) liability account with a credit balance.

C) contra-asset account with a debit balance.

D) contra-asset account with a credit balance.

13) The liability account used to record sales tax owed is:

A) Sales Tax Expense.

B) Prepaid Taxes.

C) Sales Tax Payable.

D) Sales.

 

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

A) a credit.

B) a debit.

C) zero.

D) It doesn’t have a normal balance.

 

15) 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.

 

16) Hardware Restoration reports net sales of $50,000. If sales returns and allowances are $10,000 and sales discounts are $1,500, what are gross sales?

A) $50,000

B) $61,500

C) $58,500

D) $38,500

17) R&R Lumber reports gross sales of $70,000. If sales returns and allowances are $10,000 and sales discounts are $3,000, what are the net sales?

A) $83,000

B) $63,000

C) $57,000

D) $70,000

 

18) Kristi’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?

A) Debit Cash for $5,000; credit Tile Sales for $5,000

B) Debit Accounts Receivable for $4,050; credit Tile Sales for $4,050

C) Debit Accounts Receivable for $4,050; debit Sales Discount for $50.00, and credit Tile Sales for $5,000

D) Debit Accounts Receivable for $5,000; credit Tile Sales for $5,000

 

19) Lisa’s Blankets and Bedding had a sale of $350 to a charge customer, terms 1/15, n/30. Lisa should record this transaction as follows:

A) debit Accounts Receivable $350; credit Sales $350.

B) debit Cash $350; credit Sales $350.

C) debit Accounts Receivable $346.50; debit Sales Discounts $3.50; credit Sales $350.

D) debit Sales $350; credit Accounts Receivable $350.

 

20) Unlimited Materials sold goods for $2,000 plus 6% sales tax to a charge customer, terms n/30. Which entry is required to record this transaction?

A) Debit Accounts Receivable for $2,120; credit Sales Tax Payable $120 and credit Sales for $2,000

B) Debit Cash for $2,000; credit Sales for $2,000

C) Debit Accounts Receivable for $2,000; credit Sales for $2,000

D) Debit Accounts Receivable $2,120; credit Sales, $2,120

 

 



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