1) Which of the following describes the Sales Returns and Allowances account?

Multiple Choice

• A revenue account with a normal credit balance.

• An expense account with a normal debit balance.

• A contra expense account with a normal debit balance.

• A contra revenue account with a normal debit balance

The amount of the trade discount taken by the customer is:

Multiple Choice

• recorded as an expense.

• recorded as a revenue.

• recorded as a liability.

• not recorded directly as sales are recorded net of trade discounts.

Kay Sadia sold merchandise for $7,200 subject to a 8% sales tax. The entry in the general journal will include a debit to Accounts Receivable for:

Multiple Choice

• $6,624.00.

• $7,200.00.

• $7,776.00.

• $12,960.00.

Modern Candy, a wholesaler, sold a crate of candy for $360.00 on account to a customer with credit terms of 1/10, n/30. If the customer pays within the discount period, what would be the total amount credited to the sales account?

Multiple Choice

• $360.00

• $356.40

• $363.60

• $324.00

Kay Sadia sold merchandise for $7,200 subject to 8% sales tax. The entry in the general journal to record the sale will include:

Multiple Choice

• a debit to Sales Tax Payable for $576.00.

• credit to Sales for $7,200.00.

• a credit to Sales for $7,776.00.

• a debit to Accounts Receivable for $7,200.00.