Accounting Chapter 10 Review

If a customer buys $300 worth of merchandise and the sales tax is 8%, the total bill the customer must pay is

• $300

• $304

• $324

• $342

Using a cash register tape as a source document for weekly cash and credit card sales is an application of the accounting concept

• Matching expenses with revenue

• Objective Evidence

• Realization of revenue

• Business Entity

The journal entry for a cash and credit card sales transaction is

• debit cash; credit sales; credit sales tax payable

• debit cash; debit sales tax payable; credit sales

• debit sales; credit cash; credit sales tax payable

• debit sales tax payable; debit cash; credit sales

Sales invoices should be

• numbered in sequence

• prepared in triplicate

• used as source documents for sales on account.

• all of the above

A sale on account transaction

• increases the balance of he accounts payable account.

• increases the amount to be collected later from a customer.

• decreases the amount to be collected later from a customer

• decreases the balance of the accounts receivable account

When merchandise is sold on account and sales tax is also collected,

• Accounts Receivable is credited for the total sale and sales tax.

• the accounts receivable account balance is increased.

• Sales is debited for the price of the goods.

• The sales tax is not reported.

The journal entry for a cash receipt on account is

• debit cash; credit accounts receivable

• debit cash; credit accounts payable.

• debit accounts payable; credit cash.

• debit accounts payable; credit accounts receivable.

The revenue account Sales has a normal credit balance

• true

• false

The liability account Sales Tax Payable has a normal debit balance.

• True

• False

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

• True

• False