Chapter 7 Flashcards Preview

Accounting 100 > Chapter 7 > Flashcards

Flashcards in Chapter 7 Deck (10):
1

A firm which sells goods that it purchases for re-sale is a?

Merchandising Business.

2

The Sales Returns and Allowances account is classified as a?

Contra Revenue Account

3

If Morgan Industries issued a Credit Memorandum 1204 on January 20 for a return of $400 merchandise purchased on account by Doug Bowen, plus 8% sales tax, the credit memorandum would total:

$432

4

Assuming no sales tax is collected, a business credit card sale is recorded as a?

Debit to Accounts Receivable and a Credit to Sales.

5

Suppose the list price of goods is $1000 and the trade discount is 20%. What is the amount of the discount and what is the net price the wholesaler records as sales?

$200;$800

6

If an Invoice lists “2/10, n/30”, these numbers and letters are known as?

The credit terms.

7

Connor Company sells merchandise for $2000 on account to Market Industries on January 21, at 1/10, n/30, Invoice 190. Market returns $200 of merchandise on January 23, receiving credit memorandum 120 from Connor. What amount would Market pay if they submit payment on January 29?

$1782

8

Merchandise is sold on credit for $500 plus 6% sales tax. The entry in the journal will include a debit to Accounts Receivable for?

$530

9

When a sales tax return is prepared, the amount of a firm’s taxable gross sales for the month are computed as?

Cash sales plus Credit sales less Sales Returns and Allowances.

10

Sampson Company collected $1300 in sales taxes from customers in March 2010. Sampson is allowed to keep 1.5% of sales Tax collected. The journal entry to record the discount kept by Sampson would include?

Debit to Sales Tax Payable for $19.50 and a Credit to Miscellaneous Income for $19.50.