Question

1) The Cash Receipts Journal is a special-purpose journal that is used to record all cash disbursements for the period.. True /False

2)The journal entry to record the owner's additional investment of cash in the business is recorded with a debit to the Cash account True/False

3)The customers' subsidiary ledgers are also known as general ledgers. True/Flase

4)When a customer pays within the discount period, the Sales Discount account is credited for the amount of discount applied.True/False

5)Sales Returns and Allowances is a contra-revenue account with a normal debit balance. True/False

6)The Cost of Sales account is found in the Balance Sheet. True/False

7) The Interest Expense account is not an operating expense account and is found in the Income Statement. True/False

8) The Sales Discount account has a normal credit balance. True/False

9) A company sold merchandise worth 1,000.00 to Customer B on May 1. The entry will include a credit to Sales Revenue for $1,000. True/False

10) When a company borrows money from the bank, the entry will include a debit to Cash. True/False

11) Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 15, Customer O paid Company N. The entry on Customer N's books to record the cash received will include:

debit to Cash for $3,400

credit to Sales Revenue for $3,400

debit to Cost of Sales for $3,000

credit to Accounts Receivable for $3,000

debit to Inventory for $3,000

12) Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 15, Customer O paid Company N. To record cash sales from cash customers, the entry will include a:

debit to Accounts Receivable

credit to Sales Revenue

debit to Inventory

credit to Cash

debit to Accounts Payable

13) Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 16, the entry on Company N's books when payment was received from Customer O will include:

debit to Accounts Receivable for $3,400

credit to Inventory for $3,400

debit to Cash for $3,000

credit to Cost of Sales for $1,000

debit to Inventory for $1,000

14)Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 16, the entry on Customer O's books to pay Company N will include:

debit to Cash for $3,000

credit to Cash for $3,000

debit to Accounts Receivable for $3,400

credit to Accounts Receivable for $3,400

debit to Inventory for $1,000

15) Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 15, the entry to record the payment of Customer O on Company N's books will include:

debit to Sales Discounts for $30

Credit to Cash for $3,000

debit to Accounts Receivable for $3,000

credit to Accounts Payable for $3,000

debit to Cost of Sales for $1,000

16) Company N sold merchandise on account to Customer O for $3,400.00 on July 1. The terms of sale are: 1/15, n/30. On July 4, Customer O returned $400.00 worth of merchandise. The cost of these inventory items sold is $1,000.00. The cost of the inventory items returned is $40.00. Both companies use perpetual inventory system.

Refer to Table 1, on July 15, the entry on Customer O's books to pay Company N will include:

debit to Accounts Receivable for $3,400

credit to Sales Revenue for $3,400

debit to Cash for $3,000

credit to Cash for $2,970

debit to Sales Discounts for $30

17) The entry to record the receipt of Cash for $5,000 from the owner for additional investment will include:

debit to Owner, Capital for $5,000

credit to Cash for $5,000

debit to Owner, Draw for $5,000

credit to Owner, Capital for $5,000

debit to Retained Earnings for $5,000

18) When a Sales Discount was applied to a customer's account because Cash was received within the discount period, the entry will include:

debit to Accounts Receivable

credit to Accounts Receivable

credit to Cash

credit to Inventory

debit to Inventory

19) To record a customer's return of defective merchandise worth $700.00 with a cost of $300, the entry on the seller's books under perpetual inventory system will include:

debit to Cash for $700

credit to Sales Revenue for $700

debit to Sales Returns & Allowances for $700

credit to Inventory for $700

debit to Cost of Sales for $300

20) A customer returned defective merchandise worth $700.00 with a cost of $300. Using perpetual inventory system, the entry on the customer's books for the return of defective merchandise worth $700 will include:

debit to Cash for $700

credit to Accounts Receivable for $700

debit to Inventory for $300

credit to Cost of Sales for $300

debit to Accounts Payable for $700