1) Tax collected on the sale of retail goods is recorded as a liability on the books of the seller.

	True
	False

2) It is not necessary to record sales tax on credit sales since none was actually collected.

	True
	False

3) Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts.

	True
	False

4) A merchandiser buys and sells merchandise in order to make a profit.

	True
	False

5) A wholesaler acts as an intermediary between manufacturers and retailers.

	True
	False

6) A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken a ___ cash discount for early payment.

1%

5%

10%

2%

7)

15% A shoe store decided to sell of some of their excess office supplies. Which journal should this transaction be recorded in?

Cash Receipts journal

General journal

Cash Disbursements journal

Purchases journal

Sales journal 8)Nelson Inc. sold merchandise to Ballard Corp, a retailer, on credit. Ballard is not subject to sales tax because he is not the end user of the item purchased. In which journal should Nelson record this sale?

	Sales journal
	Purchases journal
	General journal
	Cash Receipts journal
	Cash Disbursements journal

9) The sales journal is used for recording:

	Cash purchases.
	Cash sales.
	Credit sales.
	Credit purchases.
	Cash receipts.