Chapter 10 accounting for sales and cash recipts

Question 1

Selling price

Answer 1

The amount a business receives from the sale of an
item of merchandise

Question 2

markup

Answer 2

the amount a business adds to the cost of merchandise to establish a selling price

Question 3

accounts receivable ledger

Answer 3

a subsidiary ledger containing all accounts for charge customers

Question 4

sales tax

Answer 4

a tax on the sale of merchandise/services

Question 5

sales journal

Answer 5

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

Question 6

cash sale

Answer 6

A sale in which the customer pays for the total amount
of the sale at the time of the transaction

Question 7

point-of-sale (POS) terminal.

Answer 7

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

Question 8

terminal summary.

Answer 8

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

Question 9

batch report

Answer 9

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

Question 10

batching out

Answer 10

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

Question 11

cash receipts journal

Answer 11

special journal used to
record only cash receipt transactions.

Question 12

SALES DISCOUNT

Answer 12

cash discount on a sale taken by the customer

Question 13

schedule of
accounts receivable.

Answer 13

A listing of customer accounts, account balances, and total
amount due from all customers

Question 14

Regardless of when payment is received, the revenue should be recorded when a sale is made, not on the date cash is received.

Answer 14

true

Question 15

The accounts receivable ledger form is based on the general ledger form and contains the same columns, except the Credit balance amount column.

Answer 15

true

Question 16

Most states do not require a business to collect sales tax from customers.

Answer 16

false

Question 17

Sales tax rates are usually stated as a percentage of sales.

Answer 17

true

Question 18

The amount of sales tax collected is an expense of operating a business.

Answer 18

false

Question 19

Only the federal government can exempt from sales taxes some types of merchandise or sales to certain types of customers.

Answer 19

false

Question 20

An invoice is a form that describes the goods or services sold, the quantity and the price, and the terms of the sale.

Answer 20

true

Question 21

The invoice used as a source document for recording a sale on account is often referred to as a sales invoice, a sales ticket, or a sales slip.

Answer 21

true

Question 22

While the seller considers an invoice for a sale on account to be a sales invoice, the same invoice is considered by the customer to be a purchase invoice.

Answer 22

true

Question 23

Credit card and debit card sales are treated as cash sales because the business receives its cash in a very short time.

Answer 23

true

Question 24

A terminal summary is also known as a T-tape.

Answer 24

false

Question 25

A batch report can be detailed, showing every credit card sale. Or, the batch report can be a summary, showing only the number and total of sales by credit card type.

Answer 25

true

Question 26

Separate transactions are recorded for cash, credit card, and debit card totals listed on a terminal summary.

Answer 26

false

Question 27

Sales Tax Payable has a normal debit balance.

Answer 27

false

Question 28

When a sales discount is taken, a customer pays less cash than the invoice amount previously recorded in the sales account.

Answer 28

true

Question 29

Maintaining a separate account for sales discounts provides business managers with information to evaluate whether a sales discount is a cost-effective method.

Answer 29

true

Question 30

The posting references on the accounts receivable ledger form enable the company to locate the sales invoices and receipts supporting each transaction.

Answer 30

true

Question 31

The total of each general amount column of a cash receipts journal is posted to the corresponding general ledger account.

Answer 31

false

Question 32

A schedule of accounts receivable contains a complete listing of each sales invoice owed by customers.

Answer 32

false

Question 33

Some businesses call the schedule of accounts receivable the accounts receivable trial balance.

Answer 33

true