7 Freight-In is an adjunct-purchases account to which transportation charges on merchandise purchases are debited.

True or False

15 The sales journal can be used to enter any kind of sales, including cash sales and sales on account. True or False

16 The account in which the revenue earned from the sale of merchandise is entered is

a.	Capital.
b.	Sales.
c.	Cash.
d.	Inventory.

17 Copies of a sales invoice are used to do all of the following EXCEPT

a.	ship the merchandise.
b.	bill the customer.
c.	record the sale.
d.	record the receipt of merchandise.

18 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.

19 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.

20 After posting is completed in the accounts receivable ledger and the general ledger, the total of the accounts receivable ledger balances should equal the

a.	accounts payable account balance.
b.	accounts receivable account balance.
c.	cash account balance.
d.	net income amount.

21 A schedule of accounts receivable is prepared to

a.	verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance.
b.	send to all customers at the end of the month.
c.	prove that the general ledger and accounts receivable ledger were posted at the same time.
d.	keep track of all the company's customers.

22 A discount offered as an inducement for prompt payment of an invoice is called a(n)

a.	trade discount.
b.	invoice discount.
c.	early discount.
d.	cash discount.

23 Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?

a.	COD
b.	FOB shipping point
c.	FOB destination
d.	4/10, EOM

24 Which of the following credit terms allows a discount of 2% if payment is made within 10 days with the total amount of the invoice due within 60 days?

a.	2/10, n/30
b.	2/10, EOM/60
c.	10/2, n/60
d.	2/10, n/60

25 The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called

a.	purchases.
b.	net purchases.
c.	purchases returns and allowances.
d.	cost of goods sold.

26 A common approach to keeping a record of each customer's accounts receivable is to use a(n)

a.	sales journal.
b.	accounts receivable ledger.
c.	general ledger.
d.	controlling account.

27 After posting is completed in the accounts receivable ledger and the general ledger, the total of the accounts receivable ledger balances should equal the

a.	accounts payable account balance.
b.	accounts receivable account balance.
c.	cash account balance.
d.	net income amount.

28 For the merchant, bank credit card sales are treated in a manner similar to

a.	sales on account.
b.	cash sales.
c.	installment sales.
d.	layaway sales.

29 Purchases returns and allowances are recorded in the

a.	merchandise journal.
b.	general journal.
c.	purchases journal.
d.	accounts payable journal.

30 A list showing the amount due to each supplier as of a specified date is known as the

a.	schedule of accounts receivable.
b.	trial balance.
c.	balance sheet.
d.	schedule of accounts payable.