Financial Accounting Quiz

A sales invoice is a source document that

• provides support for goods purchased for resale.

• provides evidence of incurred operating expenses.

• provides support for credit sales.

• serves only as a customer receipt.

Sales revenue

• may be recorded before cash is collected.

• will always equal cash collections in a month.

• only results from credit sales.

• is only recorded after cash is collected.

The journal entry to record a credit sale is

• Cash Sales Revenue

• Cash Service Revenue

• Accounts Receivable Service Revenue

• Accounts Receivable Sales Revenue

The Sales Returns and Allowances account is classified as a(n)

• asset account.

• contra−asset account.

• expense account.

• contra−revenue account.

A credit sale of $3,600 is made on July 15, terms 2/10, n/30, on which a return of $200 is granted on July 18. What amount is received as payment in full on July 24?

• $3,600

• $3,332

• $3,400

• $3,528

When goods are returned that relate to a prior cash sale,

• the Sales Returns and Allowances account should not be used.

• the Cash account will be credited.

• Sales Returns and Allowances will be credited.

• Accounts Receivable will be credited.

The Sales Returns and Allowances account does not provide information to management about

• inferior merchandise.

• the percentage of credit sales versus cash sales.

• inefficiencies in filling orders.

• errors in billing customers.

As an incentive for customers to pay their accounts promptly, a business may offer its customers

• a sales discount.

• free delivery.

• a sales allowance.

• a sales return.

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that

• the customer must pay the bill within 10 days.

• the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date.

• the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date.

• two sales returns can be made within 10 days of the invoice date and no returns thereafter.

Company A sells ¥9,000 of merchandise on account to Company B with credit terms of 2/10, n/30. If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

• ¥6,300

• ¥8,820

• ¥8,100

• ¥7,200