Chapter 14 - Accounting for Sales and Cash Receipts

Front

What is the controlling account for a company's customers?

Back

Accounts Receivable

Front

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

Back

True

Front

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

Back

False

Front

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

Back

True

Front

Sales Tax Payable has a normal debit balance.

Back

False

Front

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

Back

True

Front

When a sales discount is taken, does a customer pay less cash than the invoice amount previously recorded in the sales account?

Back

True

Front

What is the journal entry for Down the River Canoe to record the sale of merchandise for cash to Low Rent Tours for $150, plus sales tax of $11?

Back

debit Cash, $161; credit Sales, $150, Sales Tax Payable, $11.

Front

What is the journal entry for Quick Supply to record the sale of office supplies for $45 plus sales tax of $3 to Jet Set Travel?

Back

debit Cash, $48; credit Sales, $45, Sales Tax Payable, $3.

Front

Tricky Ricky's Appliances sold merchandise on account to Smith Builders for $880, plus sales tax of $40. What is the journal entry for this transaction?

Back

debit Accounts Receivable/Smith Builders, $920; credit Sales, $880, Sales Tax Payable, $40.