12. Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for

a.

$84.60.

b.

$90.00.

c.

$95.40.

d.

$93.60.

13. A customer returns merchandise that was delivered in poor condition and that does not meet specification. The account that the seller would debit for the amount of the return is

a.

Sales Returns and Allowances.

b.

Purchase Returns and Allowances.

c.

Sales.

d.

Purchases.

14. A credit memorandum for $156 (sales price of merchandise, $150; sales tax $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly,

a.

Accounts Receivable would be credited for $6.

b.

Accounts Receivable would be credited for $150.

c.

Accounts Receivable would be credited for $156.

d.

Accounts Receivable would not be credited.

15. From the following data, compute net sales.

Sales

$537,000

Sales returns and allowances

6,315

Sales discounts

715

16. The accounts receivable account in the general ledger has a balance of $11,280. The accounts receivable ledger has the following account balances:

A. Broccoli

$3,242

B. Reilly

1,610

C. Greenspan

4,723

J. Fuentez

?

Determine how much J. Fuentez owes.

17. Assume the gross amount of an invoice is $200 and a trade discount of 10% is allowed. The amount to be entered in the accounting records would be

a.

$20.

b.

$220.

c.

$200.

d.

$180.

18. From the following data, compute net sales.

Sales

$727,500

Sales returns and allowances

6,421

Sales discounts

434

19. The terms on an invoice are 4/15, n/30. This means that

a.

a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice.

b.

a discount of 15% will be allowed if payment is made with 4 days from the date of the invoice.

c.

a discount of 4% will be allowed if payment is made by the 15th of the month.

d.

a discount of 15% will be allowed if payment is made by the 4th day after the date of the invoice.

20. An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms on 3/10, n/30. If the invoice is not paid within the discount period, the amount that would be paid to satisfy the invoice would be

a.

$824.40.

b.

$888.52.

c.

$981.27.

d.

$916.00.

Explain why we use Accounts Payable Ledgers and Accounts Receivable Ledgers: