If merchandise is bought with a list price of $3,500, subject to a 25 percent trade discount and a cash discount of 2/10, n/30, the amount credited to Accounts Payable is $2,625.

True

False

Which of the following accounts are considered contra accounts?

a.Purchase Returns & Allowances

b.Sales Returns & Allowances

c.Sales Discounts

d.All of these choices are correct

What is the journal entry to record the receipt of payment on June 15th for the following: June 1st, merchandise sold on account in the amount of $525, credit terms 1/10, n/30.

a.Accounts Receivable525 DR

Cash525 DR

b.Cash525 DR

Sales Discount5.25 CR

Accounts Receivable519.75 CR

c.Accounts Receivable519.75 DR

Sales Discount5.25 DR

Cash525 CR

d.Cash525 DR

Accounts Receivable525 DR

You will never find the following combination of accounts in a journal entry except

a.Accounts Payable and Accounts Receivable.

b.Accounts Payable and Sales.

c.Purchases Returns and Allowances and Accounts Payable.

d.Sales Returns and Allowances and Accounts Payable.

e.Accounts Receivable and Purchases.

Which of the following means "do not postthe figures have already been posted separately" in a cash receipts journal?

a.An (A) under the total of the Accounts Receivables Accounts Debit Column

b.An (Z) under the total of the Expense Accounts Credit Column

c.An (B) under the total of the Wages Accounts Credit Column

d.An (Y) under the total of the Sales Accounts Debit Column

e.An (X) under the total of the Other Accounts Credit Column

If merchandise bought on account has a list price of $5,000, with a trade discount of 25% and credit terms of 1/10, n/30, what is the amount to be credited to Accounts Payable?

a.$3,787.50

b.$3,712.50

c.$5,000

d.$3,750

Indicate the appropriate columns in which the following transaction would be recorded in the cash receipts journal: Cash collected on account from a customer.

a.CashDR

SalesCR

b.CashDR

Accounts ReceivableCR

c.CashDR

Other AccountCR

d.Accounts ReceivableDR

CashCR

A credit to an account in the accounts payable ledger would have been posted from the cash payments journal if special journals are used.

True

False

Payment of merchandise purchased on account within the discount period is recorded in the cash payments journal.

True

False

Sales of merchandise on account would be recorded in which journal?

a.Sales Journal

b.General Journal

c.Sales Receipt Journal

d.Sales Payment Journal

The listing of cash discounts is not a part of the credit terms.

True

False

The agreement between a seller and a buyer about payment on a purchase is called

a.Purchase Agreement

b.Credit Period

c.Credit Terms

d.Credit Agreement

What is the recommended order that special journals should be posted to the subsidiary ledgers and the general ledger?

a.No special order is recommended

b.Sales, Cash Receipts, Purchases, Cash Payments

c.Sales, Purchases, Cash Payments, Cash Receipts

d.Sales, Purchases, Cash Receipts, Cash Payments

Which of the following statements is NOT true?

a.Freight costs are included when determining discounts.

b.Sales Discounts is a contra-revenue.

c.Sales Returns & Allowances has a DR normal balance.

d.Purchase Discounts is a contra account.

Credit card receipts, cash, checks, electronic funds transfers are all examples of source documents that would be recorded in the following journal:

a.Cash Receipts Journal

b.Purchase Journal

c.Sales Journal

d.General Journal

A purchase of merchandise on account is recorded in the cash payments journal.

True

False

Carlyle Company sold goods for $425 plus a 7 percent sales tax to a customer using a bank credit card. The bank deducts a 3 percent discount. Carlyle Company debits Cash for

a.$454.75.

b.$441.11.

c.$468.50.

d.$437.75.

e.$412.25.

Sales Discounts and Sales Returns and Allowances have the following characteristics in common:

a.Contra-Revenue, DR

b.Contra-Asset, DR

c.Contra-Revenue, CR

d.Contra-Asset, CR

On October 30, goods with a list price of $9,200 are sold, subject to a trade discount of 25 percent with terms of 2/10, n/30. Payment is received from the customer on November 5. The amount of cash received on November 5 is

a.$6,762.

b.$8,770.

c.$6,900.

d.$6,160.

e.$6,036.

Accounts Payable would appear as a debit in

a.the sales journal.

b.the purchases journal.

c.the cash receipts journal.

d.the cash payments journal.

e.all the special journals.