It is much more important to post daily to the subsidiary ledger than to post daily to the general ledger.

True

False

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.Cash525 DR

Accounts Receivable525 DR

b.Cash525 DR

Sales Discount5.25 CR

Accounts Receivable519.75 CR

c.Accounts Receivable519.75 DR

Sales Discount5.25 DR

Cash525 CR

d.Accounts Receivable525 DR

Cash525 DR

This journal contains all of the transactions from cash increasing

a.Purchase Journal

b.Sales Journal

c.Cash Receipts Journal

d.Cash Payment Journal

A characteristic of the Sales Discount account is:

a.It records cash discounts given to customers for prompt payment

b.It has a Debit Normal Balance

c.It is a Contra-Asset Account

d."It has a Debit Normal Balance" & "It records cash discounts given to customers for prompt payment"

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

Accounts ReceivableCR

b.Accounts ReceivableDR

CashCR

c.CashDR

Other AccountCR

d.CashDR

SalesCR

Accounts Payable would appear as a debit in

a.the cash receipts journal.

b.the sales journal.

c.the cash payments journal.

d.the purchases journal.

e.all the special journals.

A business sells merchandise, $500, on account with terms of 1/20, n/60. The customer pays within the discount period. The amount recorded in the Cash Debit column is:

a.$300.00.

b.$618.00.

c.$345.00.

d.$228.00.

e.$495.00.

The normal balance of the Purchases Discounts account is on the credit side.

True

False

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 December 11. The amount of cash received on December 11 is

a.$2,640.

b.$6,160.

c.$6,900.

d.$6,036.

e.$8,770.

Transactions for sales discounts affecting Accounts Receivable are recorded in the general journal.

True

False

A cash discount of 1/15, n/30 included in the credit terms of a sale indicates that the buyer should make payment:

a.after 30 days to avail the discount of 1%.

b.within 15 days to avail the discount of 1%.

c.after 30 days to avail the discount of 2%.

d.within 15 days to avail the discount of 2%.

Merchandise costing $2,500 FOB shipping point, terms 1/10, n/30, with prepaid transportation costs of $130, is purchased on account. If the bill is paid within ten days, the amount of the purchase discount is $26.30.

True

False

Tyler Corporation bought office supplies for $125 cash. In what journal would this transaction be recorded?

a.Sales Journal

b.Purchase Journal

c.Cash Receipt Journal

d.Cash Payment Journal

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.$6,160.

b.$6,762.

c.$6,900.

d.$6,036.

e.$8,770.

Which of the following statements is NOT true?

a.Purchase Discounts is a contra account.

b.Freight costs are included when determining discounts.

c.Sales Discounts is a contra-revenue.

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

A sizable reduction from the list price of merchandise purchased that is NOT recorded on the buyers books.

a.Purchase Adjustment

b.Purchase Discount

c.Trade Discount

d.Sales Discount

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

a.Accounts Receivable and Purchases.

b.Accounts Payable and Sales.

c.Accounts Payable and Accounts Receivable.

d.Sales Returns and Allowances and Accounts Payable.

e.Purchases Returns and Allowances and Accounts Payable.

The amount a customer can deduct if the bill is paid within a specific period of time is called a

a.Trade Discount

b.Credit Period

c.Credit Discount

d.Cash Discount

Trade discounts are

a.Price reductions from list prices

b.Price reductions from net prices

c.Price reductions for companies that trade goods and services

d.Price reductions for bartered services