Unit 6 - Accounting

Why is the amount of sales tax collected recorded in a liability account?

• You have to pay it back to the owner.

• You owe the amount collected to the governing entity who enforces sales tax laws.

• It is an expense you have to account for.

• It will be recorded on your business taxes.

What columns would you use in an expanded journal to record receiving a payment on account?

• Cash debit column Accounts credit column

• Cash debit column Receivable credit column

• General debit column Accounts Receivable credit column

• Accounts Receivable debits column and cash credit column

A business from which merchandise or other assets are purchased is called

• Partner

• Vendor

• Client

• Customer

The amount of sales tax collected is recorded in a(n)

__________ account.

• Revenue

• Assets

• Expense

• Liability

The sale of merchandise increases the

__________ of a business.

• Revenue

• Expenses

• Assets

• Liabilities

When the Account Title column is not used to record a transaction, what character or symbol is used to indicate that nothing is recorded in the column?

• a asterisk

• a checkmark

• a forward slash

• a comma

Which of the following would not use the Account Title column when recording the transaction in an expanded journal?

• withdrew merchandise for personal use

• recorded cash sales

• paid on account

• bought supplies on account

The price a business pays for goods it purchases to sell is called:

• Purchase Price

• Purchase Invoice

• Cost of Invoice

• Mark up

The purpose of a double-line rule used when ruling a journal is to:

• verify that the column totals are accurate

• show that you are finished

• signify that you made money that month

• keep the columns neat and organized

How would you journalize the transaction "sold merchandise on account" in an expanded journal?

• debit Cash and credit Sales and Sales Tax Payable

• debit Accounts Payable and credit Sales and Sales Tax Payable

• debit Sales and Sales Tax Payable and credit Cash

• debit Accounts Receivable and credit Sales and Sales Tax Payable