AccountingChapter 10

Review

Journalizing Sales and Cash Receipts Using Special Journals

A special journal used to record only sales of merchandise on account

Sales Journal

A cash discount on sales taken by a customer.

Sales Discount

The report that summarizes the cash and credit card sales of a point-of-sale terminal

Terminal Summary

A sale in which a credit card is used for the total amount of the sale at the time of the transaction

Credit Card Sale

A special journal used to record only cash receipt transactions

Cash receipts journal

A form prepared by the vendor showing the amount deducted for returns and allowances

Credit Memorandum

A computer used to collect, store, and report all the information of a sales transaction

Point-of-sale Terminal

The process of preparing a batch report of credit card sales from a point-of-sale terminal

Batching Out

Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor’s accounts receivable.

Sales Allowance

A report of credit card sales produced by a point-of-sale terminal

Batch Report

TRUE or FALSE?TRUE or FALSE?

When cash is received for a sale on account within the discount period, the amount credited to Accounts Receivable is reduced by the amount of the discount.

TRUE or FALSE?TRUE or FALSE?Regardless of when merchandise is sold, revenue should be recorded when cash is received.

TRUE or FALSE?TRUE or FALSE?Point-of-sale terminals use UPC symbols to obtain the description and price of merchandise sold.

TRUE or FALSE?TRUE or FALSE?Because Sales Discount is a contra account to Sales, it has a normal credit balance.

TRUE or FALSE?TRUE or FALSE?Purchases and sales of merchandise are the two major activities of a merchandising business.

TRUE or FALSE?TRUE or FALSE?Cash is proved when the total of the Cash Debit column of a cash receipts journal equals the next unused check stub.

TRUE or FALSE?TRUE or FALSE?A terminal summary reports total cash and credit card sales of a point-of-sale terminal.

TRUE or FALSE?TRUE or FALSE?When a customer is granted credit for merchandise returned, Accounts Receivable is debited.

TRUE or FALSE?TRUE or FALSE?The amount of sales tax collected is an asset of the business until paid to the state government.

A.

B.

C.

D.

E.

Using a terminal summary as a source document for weekly cash and credit card sales is an application of the accounting concept.

Business Entity

Matching Expenses with Revenue

Realization of Revenue

Objective Evidence

A.

B.

C.

D.

E.

The amount of cash received for a sale on account of $1,000.00 plus sales tax of $80 when the cash is received within the 2 percent discount period is.

1062.00

1053.60

1080.00

1058.40

A.

B.

C.

D.

E.

Sales Returns and Allowances is:

A contra expense account

An expense account

A revenue account

A contra Revenue Account

A.

B.

C.

D.

E.

Sales invoices should be

Numbered in sequence

Used as source documents for sales on account

Prepared in triplicate

All of the above

A.

B.

C.

D.

E.

The amount of sales tax on a sale is calculated as the price of goods

Plus the sales tax rate

Divided by the sales tax rate

Minus the sales tax rate

Times the sales tax rate

A.

B.

C.

D.

E.

For a sale on account of $1,000.00 plus sales tax of $80.00, the amount recorded in the Accounts Receivable Debit column of a sales journal is

$1,000.00

$920.00

$80.00

$1,080.00

A.

B.

C.

D.

E.

When merchandise is sold on account and sales tax is also collected,

The sales tax is not reported

Sales is debited for the price of the goods.

Accounts Receivable is credited for the total sale and sales tax

The accounts receivable account balance is increased.

A.

B.

C.

D.

E.

Sales discounts are recorded in

Batch Report

General Journal

Sales Journal

Cash Receipts Journal