7.

Tonys Market recorded the following events involving a recent purchase of merchandise. He received goods for $50,000, terms 2/10, n/30, then returned $1,000 of the shipment for credit. He then paid $250 freight on the shipment and paid the invoice within the discount period. As a result of these events, the companys merchandise inventory

increased by $48,020.

increased by $49,250.

increased by $48,265.

increased by $48,270.

8.

Mather Company made a purchase of merchandise on credit from Underwood Company on August 8, for $9,000, terms 3/10, n/30. On August 17, Mather makes the appropriate payment to Underwood. The entry on August 17 for Mather Company includes

a credit to Accounts Payable for $9,000.

a credit to cash for $9,000.

A debit to inventory for $270.

A credit to cash for $8,730.

9.

Rasner Co. returned defective goods costing $3,000 to Markum Company for credit. The goods had been purchased on credit, terms 3/10, n/30, but had not yet been paid. The entry by Rasner Co. includes

a credit to merchandise inventory for $3,000.

a credit to merchandise inventory for $2,910.

a credit to accounts payable for $3,000.

a credit to accounts payable for $2,910.

10.

Griffey Company has cash sales of $4,200 from merchandise costing $3,000. The entries to record the days cash sales will include

a $3,000 credit to Cost of Goods Sold.

a $4,200 credit to Cash.

a $3,000 credit to Merchandise Inventory.

a $4,200 debit to Accounts Receivable.

11.

A credit sale of $800, terms 2/10, n/30, was made and then $50 was returned for credit. If the amount is paid in full 9 days later, the amount paid is

$735.

$784.

$800

$750.

12.

The entry to record the receipt of payment within the discount period on a sale of $750, with terms 2/10, n/30, will include a credit to

Sales Discount for $15.

Cash for $735.

Accounts Receivable for $750.

Sales for $750.

13.

The collection of a $600 account within the 2 percent discount period will result in a

debit to Sales Discounts for $12.

debit to Accounts Receivable for $588.

credit to Cash for $588.

credit to Accounts Receivable for $588.

14.

The journal entry to record a credit sale of merchandise includes the accounts

Cash and Sales.

Cash and Service Revenue.

Accounts Receivable and Service Revenue.

Accounts Receivable and Sales

15.

When goods are returned to your company that relate to a prior cash sale,

the Sales Returns and Allowances account should not be used.

the cash account will be credited.

Sales Returns and Allowances will be credited.

Accounts Receivable will be credited.

16.

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that

the customer must pay the bill within 10 days.

the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date.

the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date.

two sales returns can be made within 10 days of the invoice date and no returns thereafter.

17.

Moses Company sells merchandise on account for $2,000 to Lane Company with credit terms 2/10, n/30. Lane Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. Moses Companys entry upon receipt of the check includes

a debit to Accounts Receivable for $2,000.

a credit to Cash for $1,666.

a debit to Sales Discounts for $34.

a credit to Sales Returns and Allowances for $300.

20.

The collection of a $900 account after the 2 percent discount period has ended will result in a

debit to Cash for $882.

debit to Accounts Receivable for $900.

debit to Cash for $900.

debit to Sales Discounts for $18.

18.

Which of the following accounts has a normal credit balance?

Sales Returns and Allowances

Sales Discount

Sales

Selling Expense.

19.

When a seller grants credit for returned goods, one of the accounts that is credited is

sales.

sales returns and allowances.

merchandise inventory.