31) Sold merchandise on account would be recorded with:

A) a debit to an asset account.

B) a debit to a liability account.

C) a debit to Capital.

D) None of these are correct.

 

32) Customer returned merchandise for credit. This will be recorded with:

A) a debit to an asset account.

B) a debit to a liability account.

C) a credit to an asset account.

D) None of these are correct.

33) A wholesale customer returned merchandise having already paid for it within the cash discount period. The return will be recorded with:

A) a credit to an asset account.

B) a credit to a liability account.

C) a credit to Capital.

D) None of these are correct.

 

34) The total of all cash sales and credit sales equals:

A) net sales.

B) gross sales.

C) sales discount.

D) sales returns and allowances.

 

35) Sales discounts are not taken on which of the following?

A) Sales Tax

B) Freight

C) Merchandise returned

D) Sales Discounts are not taken on any of the above.

 

36) Sue’s Jewelry sold 20 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 original sale would include:

A) a debit to Accounts Receivable for $530.

B) a debit to Accounts Receivable for $500.

C) a debit to Sales for $530.

D) a debit to Sales for $500.

37) Logan’s Art studio was moving and sold furniture that was no longer needed for cash. The entry would include:

A) a credit to Sales.

B) a debit to Sales.

C) a credit to Furniture.

D) a debit to Furniture.

 

38) The normal balance of Sales Tax Payable is a credit.

 

39) Net Sales equals Gross Sales – Sales Returns and Allowances – Cash Sales.

 

40) If management wanted to determine if customers were returning goods at a higher rate than usual it could use the Sales Returns and Allowances account to analyze the information.

 

 

 



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