Vocab
A business that sells to retailers is called a(n) _____.
Wholesaler
When a retail merchandising business sells goods to a customer, the amount of the sold merchandise is credited to the Merchandise Inventory account.
False
Identify the Debit and Credits parts:
Sold on account to Ariana Marquez merchandise worth $1,750.00 plus sales tax of $87.50, Sales Slip 422.
Debit: Accounts Receivable/Ariana Marquez
Credit: Sales, Sales Tax Payable
Identify the Debit and Credit parts:
Paid to Seitz Insurance $2,400.00 for the premium on a one-year insurance policy, Check 445.
Debit: Prepaid Insurance
Credit: Cash
What is the last day Sunshine Builders can pay the invoice and still receive a discount?
October 2
A ledger or book of accounts that is summarized in a controlling account in the general ledger is called a(n) _______.
Subsidiary ledger
Sales taxes collected by a business represent a liability until they are paid.
True
Identify the Debit and Credit Parts:
Received a check from Mariner High School to apply on account, $275.00, Receipt 523.
Debit: Cash
Credit: Accounts Receivable/Mariner High School
Identify the Debit and Credit parts:
Purchased merchandise on account from Best, Inc., $2,300.00, Invoice 302, terms 2/10, n/30.
Debit: Purchases
Credit: Accounts Payable/Best
What would be the amount of the cash discount?
$128
A business that sells to the final user is known as a(n) _____.
Retailer
The increase side of the account Sales Discounts is a credit.
F
Identify the Debit and Credit parts:
Issued Credit Memo 113 to Ariana Marquez for the return of merchandise originally sold on account, $150.00 plus sales tax of $7.50.
Debit: Sales returns and allowances, sales tax payable
Credit: Accounts Receivable/Ariana Marquez
Identify the Debit and Credit parts:
Issued Check 446 for $350.00 to Halliday Transport for shipping charges on merchandise purchased from Best, Inc.
Debit: Transportation In
Credit: Cash
What amount would Sunshine Builders pay if it sends a check to Illuminations Lighting Center on or before the discount date? Assume that the sales tax amount owed is not reduced by the cash discount rate.
$6,592
The balance of a(n) _________ must agree with the balance of the accounts n its related subsidiary ledger.
Controlling account
A tickler file contains folders for each day of the month so invoices can be placed in the folders according to their due dates.
True
Identify the Debit and Credit parts:
Received a check from GTS, Inc., for $2,472.00 in payment of its account balance of $2,520.00 less a 2 percent cash discount of $48.00, Receipt 525.
Debit: Cash, Sales Discounts
Credit: Accounts Receivable/GTS
Identify the Debit and Credit parts:
Issued Check 448 for $2,254.00 to Best, Inc., for merchandise purchased on
account, $2,300.00 less a cash discount of $46.00.
Debit: Accounts Payable/Best
Credit: Purchase Discounts, Cash
What would be the amount credited to Sunshine Builders' account if it pays within the discount period?
$6,720
An account whose balance is a decrease to its related account.
Contra account
Accounts in the accounts payable subsidiary ledger have normal debit balances.
False
Identify the Debit and Credit parts:
Sold merchandise on account to Mariner High School for $750.00, Sales Slip 424.
Debit: Accounts Receivable/Mariner High School
Credit: Sales
Identify the Debit and Credit parts:
Issued Debit Memo 101 to LaChine Corporation for $395.00 in defective
merchandise returned.
Debit: Accounts Payable/LaChine
Credit: Purchase Returns and Allowances
What is the last day to pay the net amount of the invoice?
October 22