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QUE STION 1 Which of the following accounts is a contra account to Sales? a. Accounts Pavable b. Sales Returns and Allowances C. Accounts Receivable d. Interest Revenue QUESTION 2 For the perpetual inventory system, which of the following effects does NOT occur upon the return from a customer of merchandise sold on account? a. Increases Sales Returns and Allowances and decreases Accounts Receivable b. Decreases Cost of Merchandise Sold and increases Merchandise Inventory C. Increases Purchase Returns and Allowances and decreases Merchandise Inventory d. All of these occur QUESTION 3 ultiple-step income statements show a. gross profit but not income from operations b. neither gross profit nor income from operations C. gross pro inco d. income from operations but not gross profit QUESTION 4 Gold Co. sold merchandise to Bronze Co. on account, $25,000, terms 2/15, net 45. The cost of the merchandise sold is $18,500. Gold Co. issued a credit memorandum for $2,500 for merchandise returned that originally cost $1,900. Bronze Co. paid the invoice within the discount period. What is amount of net sales from the transactions? a. $5,450 b. $22.000 c. $22,050 d. $22,500 QUESTION 5 If Martin, Inc. sold S550,000 worth of merchandise, had S50,000 returned, and then the balance paid during the 2% discount period, how much was Martin's net sales? a. $490,000 b. $500,000 c. $510,000 d. $550,000 QUE STION 6 A sales invoice included the following information: merchandise price, $4,500; transportation, S300; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller? a. $3,861 b. $4.15S c. $4,161 d. $4,200Step by Step Solution
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