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


52) Use the following information to answer the questions below:



Sales Discount1,500

Sales Returns and Allowances900

Transportation Expense700


The Net Sales are ________.


53) Compare and discuss a discount period versus a credit period.

54) Determine the amount of net sales given:

gross sales = $200,000

sales discounts = $25,000

sales returns and allowances = $40,000

$ ________


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


56) Calculate gross sales:

net sales = $100,000

sales returns and allowances – $25,000

sales discounts – $20,000

accounts receivable – $12,000


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

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.




Column 1

Column 2

Column 3









Column 1

Column 2

Column 3

Professional Fees Earned








Column 1

Column 2

Column 3

Sales Returns and Allowances









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