Sales Discount and Tax Practice

Categorize our the following accounts into their normal balance categories.

Groups:

(a) Normal Debit Balance

,

(b) Normal Credit Balance

• Sales Discounts

• Cash

• Accounts Receivable

• Accounts Payable

• Sales Returns & Allowances

• Sales Tax Payable

• Sales

ABC corporation sold merchandise for $665, plus sales tax of $48, to Auto Plastics who paid for the merchandise with a bank credit card at the time of the sale. What is the journal entry for ABC Corporation?

• debit Sales, $665, Sales Tax Payable, $48; credit Cash $713.

• debit Cash, $713; credit Sales, $665, Sales Tax Payable, $48.

• debit Accounts Receivable/Auto Plastics, $713; credit Cash, $713.

• 
  debit Sales, $665, Sales Tax Payable, $48; credit Accounts Receivable/Auto Plastics, $713.

Fridges Are Us sold older model appliances to a local bakery on account for $137, plus a sales tax of $8. What Fridges journal entry to record this transaction?

• 
  debit Accounts Receivable/Bakery, $145; credit Purchases, $137, Sales Tax Payable, $8.

• 
  debit Purchases, $137, Sales Tax Payable, $8; credit Accounts Receivable/Bakery, $145

• 
  debit Sales, $137, Sales Tax Payable, $8; credit Accounts Receivable/Bakery, $145.

• 
  debit Accounts Receivable/Bakery, $145; credit Sales, $137, Sales Tax Payable, $8.

Mary's Southern Grill received $118 cash from the Town's Recreation Center for payment on account of a catering job. They took a $3 discount for early payment. What is the journal entry for Mary's Southern Grill?

• debit Sales Discounts, $3, Accounts Receivable/Towns Recreation, $115; credit Cash, $118

• debit Accounts Receivable/Towns Recreation, $121; credit Cash, $118, Sales Discounts, $3.

• debit Cash, $118, Sales Discounts, $3; credit Accounts Receivable/Towns Recreation, $121

• debit Cash, $118; credit Sales Discounts, $3, Accounts Receivable/Towns Recreation, $115.

If Junior Riding company has to collect 8.2 % on all sales, what amount would he credit to sales tax payable on a $312 motorcycle sale?

• $25.59

• $25.58

• $255.84

• $255

Calculate sales tax: 7.5% on a Sale of $950

• $72.22

• $75.00

• $712.50

• $71.25

Moped, Inc. sold merchandise for cash to Molly's Mopeds for $312, plus sales tax of $25. The journal entry for Moped, Inc. to record this transaction is:

• 
  debit Sales, $312, Sales Tax Payable, $25; credit Accounts Receivable/Molly's Mopeds, $337.

• 
  debit Accounts Receivable/Molly's Mopeds, $337; credit Sales, $312, Sales Tax Payable, $25.

• 
  debit Cash, $337; credit Sales, $312, Sales Tax Payable, $25.

• 
  debit Accounts Receivable/Molly's Mopeds, $337; credit Cash, $337.

Match the following terms to their meaning

• 10% discount in 30 days, net in 45

• 2.5/10, N/30

• Full amount due in 120 days

• 10/30, net/45

• 2.5% discount if paid in 10, net 30 days

• Net 120

• 3% discount in 15 days, net in 60 days

• 3/15, n/60

If a company sales merchandise on account for $570 on the terms 9.5/10, n/30, how much will they pay if they pay this debt in 8 days?

• $541.50

• $544.00

• $515.85

• $54.15

Hen Pharmacy received $544 cash from Raleigh Medical for payment on account. Raleigh Medical took a $26 discount for early payment. What is Hen Pharmacy's journal entry to record this transaction?

• debit Cash, $544, Sales Discounts, $26; Credit Accounts Receivable/Raleigh Medical, 570

• debit Cash, $544, credit Sales Discounts, $26, Accounts Receivable/Raleigh Medical, $518

• debit Sales Discounts, $26, Accounts Receivable/Raleigh Medical, $518; credit Cash, $544.

• debit Accounts Receivable/Raleigh Medical, $570; credit Cash, $544, Sales Discounts, $26.