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Exam 7: Accounting for Sales and Accounts Receivable

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Question 1

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The ________ ledger contains accounts for credit customers.

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accounts receivable

Question 2

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Bradley's Appliance Store had the following transactions during the month of May 2019. Record the transactions on page 5 of a sales journal and page 8 of a general journal. Total, prove, and rule the sales journal as of May 31. May 5 Sold a refrigerator to Mary Wilson. Issued Sales Slip 452 for $650 plus sales tax of $32.50. 6 Sold a freezer to Samantha Lee. Issued Sales Slip 453 for $900 plus sales tax of $45. 8 Gave Mary Wilson an allowance for scratches on her refrigerator sold on May 5, Sales Slip 452. Issued Credit Memorandum 118 for $57.75, which includes $2.75 of sales tax. 15 Sold a portable television to Jill Hanna. Issued Sales Slip 454 for $345 plus sales tax of $17.25. 20 Sold a microwave oven to Steve Ferguson. Issued Sales Slip 455 for $175 plus sales tax of $8.75. 25 Accepted a return of a defective microwave oven from Steve Ferguson. The oven was originally sold on May 20, Sales Slip 455. Issued Credit Memorandum 119 for $183.75, which includes sales tax of $8.75.

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Question 3

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After all postings have been made, the total of the schedule of accounts receivable should equal

A merchandising business sells goods that it produces.

The balance of the Sales Returns and Allowances account is subtracted from the balance of the Accounts Receivable account in the Assets section of the balance sheet.

Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:

For each of the transactions listed below, select the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal. -Sold merchandise on credit

A business that sells goods and services directly to individual consumers is called a(n)-------- business.

The entry to record a return by a credit customer of defective merchandise on which no sales tax was charged includes

Selected balances from the general ledger of the Valley Video Rentals on May 31, 2019, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended May 31, 2019. $\begin{array}{l|l}\text { Accounts Receivable } & \$ 25,000 \\\hline \text { Sales } & 65,000 \\\hline \text { Sales Tax Payable } & 3,950 \\\hline \text { Sales Returns and Allowances } & 6,200\end{array}$

An example of a merchandising company is a

Hour Place Clock Shop sold a grandfather clock for $2,250 subject to a 9% sales tax. The entry in the sales journal will include a credit to Sales for

Read the description of following transactions that are required during the accounting period for Drummond Consulting Services. Determine the account to be debited and the account to be credited. A. Received a check from a credit customer on account. B. Accepted a return of merchandise from a credit customer. The original sale involved sales tax. C. Sold merchandise on credit. The transaction involved sales tax. D. Gave an allowance to a credit customer for damaged merchandise. The original sale involved sales tax E. Sold merchandise on credit. The transaction did not involve sales tax.

The sales journal for Simon Company is shown below. Describe how the amounts would be posted to the accounts receivable subsidiary ledger accounts.

The Sales Returns and Allowances account has a normal debit balance.

One of the customer accounts from the accounts receivable ledger for Rogers Flooring is shown below. Explain each of the entries that have been posted to this customer's subsidiary ledger account.

Identify the statement below that correctly describes the Sales Returns and Allowances account.

In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the

A customer who returns goods or receives an allowance is entitled to a credit for the appropriate amount of sales tax if tax was charged on the original sale.

For each of the transactions listed below, identify the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal. A. Accepted a return of merchandise from a credit customer B. Collected sums on account from credit customers C. Gave an allowance for damaged merchandise D. Purchased merchandise on credit E. Received an additional cash investment from the owner F. Sold merchandise for cash G. Sold merchandise on credit H. Issued a check to pay a creditor on account