Test Answers on Accounting Chapter 10 – Flashcards
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A person or business to whom merchandise or services are sold
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customer
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a tax on a sale of merchandise or services
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sales tax
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a special journal used to record only sales of merchandise on account
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sales journal
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a sale in which cash is received for the total amount of the sale at the time of the transaction
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cash sale
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a sale in which a credit card is used for the total amount of the sale at the time of the transaction
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credit card sale
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a computer used to collect, store, and report all the information of a sales transaction
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point-of-sale terminal
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the report that summarizes the cash and credit card sales of a point-of-sale terminal
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terminal summary
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a report of credit card sales produced by a point-of-sale terminal
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batch report
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the process of preparing a batch report of credit card sales from a point-of-sale terminal
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batching out
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a special journal used to record only cash receipt transactions
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cash receipts journal
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a cash discount on sales taken by a customer
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sales discount
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credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor's accounts receivable
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sales return
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credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable
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sales allowance
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a form prepared by the vendor showing the amount deduct for returns and allowances
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credit memorandum
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True or False: Most states do not require a business to collect sales tax from customers
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false
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True or False: sales tax rates are usually stated as a percentage of sales
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true
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True or False: A sale of merchandise increases the revenue of a business
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true
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True or False: The Realization of Revenue accounting concept is applied when a sale is recorded at the time the sale is made
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true
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True or False: A sale on account is not the same as a charge sale
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false
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True or False: A credit card sale is a sale in which cash is received for the total amount fo the sale at the time fo the transaction
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false
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True or False: A cash sale is a sale in which a credit card is used for the total amount fo the sale at the time fo the transaction
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false
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True or False: At the end of the week, all credit card slips are gathered together, sorted by issuing bank, and mailed individually to each of the banks to collect payment
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false
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True or False: All cash receipts, including cash sales and credit card sales, are recorded in the cash receipts journal
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true
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True or False: The total of a terminal summary can be recorded as a single cash transaction
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true
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True or False:For cash and credit card sales, the asset account Cash is debited for the total of sales and sales tax, but the revenue account Sales is credited only for the total of sales
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true
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True or False: The revenue account Sales has a normal credit balance
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true
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True or False: The liability account Sales Tax Payable has a normal debit balance
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false
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True or False: The source document for cash received on account from a customer is a receipt
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true
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True or False: When cash is received on account, the cash account balance increases and the accounts receivable account balance increases
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false
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True or False: When a sales discount is taken, a customer pays less cash than the invoice amount previously recorded in the sales account
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true
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True or False: The account Sales Discount increases sales
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false
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True or False: Maintaining a separate account for sales discounts provides business managers with info to evaluate whether a sales discount is cost-effective method
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true
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True or False: if a customer does not pay the amount owed within the sales discount period, the full invoice amount is due
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true
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True or False: After the cash receipts journal is proved at the end of the month, cash is proved
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true
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True or False: All transactions can be recorded in a special journal
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false
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True or False: Credit may be granted to a customer only when merchandise is returned
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false
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True or False: Sales returns and sales allowances increases the amount of sales
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false
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True or False: the account Sales Returns and Allowances is a contra account
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true
