ACC 104

Which sales accounts normally

have a debit balance?

• Sales Discounts

• Sales Returns and Allowances

• Both (a) and (b)

• Neither (a) nor (b)

Under a perpetual inventory system, when goods are purchased for resale by a company.

• purchases on account are debited to

  Inventory

• purchases on account are debited to

  Purchases

• purchase returns are debited to Purchase

  Returns and Allowances

• freight costs are debited to Freight-Out

Generally, the revenue account for a merchandising business is entitled

• Sales

• Net Sales

• Gross Sales

• Gross Profit

The inventory system employing accounting records that continuously disclose the amount of inventory is called

• retail

• periodic

• physical

• perpetual

In recording the cost of merchandise sold for cash, based on data available from

perpetual inventory records, the journal entry is

• debit Cost of Merchandise Sold; credit

  Sales

• debit Cost of Merchandise Sold;

  credit Merchandise Inventory

• debit Merchandise Inventory; credit Cost

  of Merchandise Sold

• debit Accounts Receivable; credit

  Merchandise Inventory

Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a

• debit to Cost of Goods Sold

• credit to Accounts Payable

• credit to Merchandise Inventory

• credit to Sales

When a corporation sells merchandise and the terms are

FOB Destination and pays the shipping costs, the seller would record the transportation costs with the following entry:

• Debit Cash, credit Accounts Receivable

• Debit Freight-In, credit Cash

• Debit Accounts Receivable, credit Cash

• Debit Freight-Out, credit Cash

The sales discount is based on

• Invoice price plus transportation costs

• Invoice price less discount

• Invoice price plus transportation costs less returns and allowances

• Invoice price less returns and allowances

Freight costs incurred by the seller are recorded in the

• Sales account

• Cost of merchandise sold account

• Freight In account

• Freight Out account

When purchases of merchandise are made on account, the transaction would be recorded with the following entry:

• Debit Accounts Payable, credit

  Merchandise Inventory

• Debit Merchandise Inventory, credit

  Accounts Payable

• Debit Merchandise Inventory, credit Cash

• Debit Cash, credit Merchandise Inventory