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Exam 7: Accounting for Sales and Accounts Receivable

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Question 21

Multiple Choice

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Hugh Snow returned merchandise to Farley Co.The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:

A) Debit Accounts Payable
B) Credit to Purchase Returns and Allowances
C) Debit to Account Receivable
D) Debit Sales Returns and Allowances

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Question 22

Multiple Choice

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The amount used by wholesalers to record sales in its sales journal is

A) the retail price.
B) the list price.
C) the net price.
D) the original price.

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Question 23

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Selected balances from the general ledger of the All Star Video Rentals on July 31,2016,are listed below.Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended July 31,2016.

The entry to record a return by a credit customer of defective merchandise on which no sales tax was charged includes

ABC Skiing Essentials uses special journals.If a credit customer returns $8,000 of goods on which $560 of sales tax was charged,select the correct entry to record the return:

The reductions from list prices that many wholesale businesses offer their customers are called ____________________ discounts.

The entry to record a sale of merchandise on credit that is subject to sales tax includes a(n)____________________ to Sales Tax Payable.

A wholesale firm made sales with a list price of $1,500 and trade discounts of 25 and 15 percent.Calculate the amount the firm will use to record the sale in the sales journal.

A firm that sells goods that it purchases for re-sale is a

A(n)____________________ business sells goods that it purchases in finished form for resale.

In a firm that uses special journals,the sale of merchandise for cash is recorded in the

One of the customer accounts from the accounts receivable ledger for Paragon Consulting Services is shown below.Explain each of the entries that have been posted to this customer's subsidiary ledger account.

Sales Tax Payable is classified as a(n)____________________ account.

GiGi's Sporting Goods uses special journals.If a credit customer returns $400 of goods on which $24 of sales tax was charged,the journal entry to record the return would include:

On Deck Sports Memorabilia store sells a Babe Ruth rookie card for $4,600 on account.If the sales tax on the sale is 8%,what is the amount debited to Accounts Receivable.

On the Income Statement,Sales Returns and Allowances have the effect of

Bradley's Appliance Store had the following transactions during the month of May 2016.Record the transactions on page 5 of a sales journal and page 8 of a general journal.Total,prove,and rule the sales journal as of May 31.

Which of the following describes Sales Returns and Allowances?

Hour Place Clock Shop sold a grandfather clock for $2,250 subject to a 9% sales tax.The entry in the sales journal will include a debit to Accounts Receivable for

The Sales account is classified as a(n)