Chapter 10: Accounting For Sales and Cash Receipts Quiz

accounts receivable ledger

A separate ledger containing an individual account receivable for each customer, kept in either alphabetical or numerical order.

cash discounts

Discounts to encourage prompt payment by customers who buy merchandise on account.

contra-revenue account

An account with a debit balance that is deducted from the related revenue account.

controlling account

A summary account maintained in the general ledger with a subsidiary ledger (for example, the accounts receivable ledger).

credit memo

A document issued when credit is given for merchandise returned or for an allowance.

merchandising business

A business that purchases merchandise such as clothing, furniture, or computers, and sells that merchandise to its customers.

sale

A transfer of merchandise from one business or individual to another in exchange for cash or a promise to pay cash.

sales allowances

Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise.

sales discounts

To the seller, cash discounts are considered _______ ________

sales invoice

A document that is generated to bill the customer to whom the sale was made.

sales return

Merchandise returned by a customer for a refund.

sales ticket

A document created as evidence of a sale in a retail business.

schedule of accounts receivable

An alphabetical or numerical listing of customer accounts and balances, usually prepared at the end of the month.

subsidiary ledger

A separate ledger made up of individual accounts that contain the detail for a controlling account.

• alphabetic order

• balance up-to-date

retailer

merchants who buy goods from wholesalers for resale to customers

wholesaler

makes their product

credit

in sales of merchandise,

• what is the normal balance of sales?

revenue

what kind of account is sales?

credit

in sales of merchandise,

• what is the normal balance for sales tax payable?

• liability account

liability

what kind of account sales tax payable?

contra-revenue

what kind of account is sales, returns and allowances?

debit

what is the normal balance for sales, returns and allowances?

• excludes sales tax

contra revenue

what kind of account is sales discount?

debit

what is the normal balance of sales discount?

net

n

end of month

eom

2; ten

2/10

• _____% discount off sales price IF paid within _____ days

2/10

2% discount off sales price IF paid within 10 days

n/30

total amount due within 30 days

30

n/30

• total amount due within ______ days

2/eom

2% discount off sales price IF paid before end of month

n/60

Total amount due within 60 days

discounts

NO _______ on returns or sales tax

sales discount entry

which journal entry?

• Debit Cash

• Debit Sales Discount

• credit accounts receivable (A/R), Customer Name

debit

what is the normal balance for cash in sales discounts?

debit

what is the normal balance for sales discount in sales discounts?

credit

what is the normal balance for accounts receivable (A/R), Customer Name in sales discounts?

debit

what is the normal balance accounts receivable in sales?

customer’s name

In sales, when debiting accounts receivable, indicate _____ _____

• can be put as explanation

credit

what is the normal balance for sales and sales tax payable in sales?

general

in accounts receivable ledger, the postings go to the _____ ledger

subsidiary (T- Accounts)

in accounts receivable, when journalizing, it goes to ______ ledger

two

Ex. Post Reference - 122/ check mark

• it means it is put in how many locations

debit

In SRA, what is the normal balance for sales, return and allowance?

debit

In SRA, what is the normal balance for Sales Tax Payable (if applicable)?

credit

In SRA, what is the normal balance for accounts receivable, customer name OR cash?

general and subsidiary ledger

when posting, what two ledgers do you put?

True

in accounts receivable ledger, you put a check mark and account number

• EX. Post Ref. 122/ check mark

• T or F