Chapter 14 Concept Assessment – Flashcards

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question
a cash discount issued by the seller is a ____________.
answer
cash discount
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a _______ book that is summarized in a controlling account in the general ledger
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subsidiary ledger
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an account whose balance decreases another account's balance is a _______.
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contra account
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a credit card that is issued by a bank and honored by many businesses
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bankcard
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a form that serves as a record of cash received
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receipt
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a business that sells to the final user
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retailer
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a transaction that occurs when a business receives full payment for the merchandise sold at the time of the sale
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cash sale
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a form that lists the details of a sail and is used as a record of the transactions is a _________.
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sales slip
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contains accounts of the charge customers of a business
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accounts receivable subsidiary
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cash received by a business is referred to as a ______.
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cash receipt
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goods a business buys for resale to customers
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merchandise
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a customer to whom a sale on account is made
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charge customer
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merchandise returned to the seller for full credit
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sales return
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accounts receivable is a ________ because its balance must equal the total of the accounts receivable subsidiary ledger
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controlling account
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many states and some cities require that a business add a _______, as a percentage of the selling price of the goods, at the time of the sale
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sales tax
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the ______ of a sale state the time allowed for payment for sale on account
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credit terms
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a business that sells to retailers
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wholesaler
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a charger customer is entitled to to charge merchandise with a ________.
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credit card
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the items of merchandise a business has in stock are referred to as ________
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inventory
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permits a customer to pay for the merchandise at a later date
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sales on account
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an example of a _______ is Wal-Mart
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merchandising business
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a document prepared by the seller granting credit for damaged or returned merchandise
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credit memorandum
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a price reduction granted by a business for damaged goods kept by the customer is called a _________
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sales allowance
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the revenue account for a merchandising business is ________
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sales
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the amount a customer may deduct if the payment for merchandise is made within a certain time is a __________
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sales discount
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retailers include clothing stores, cd and tape shops, and automobile dealerships
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true
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the account merchandise inventory is classified in the chart of accounts as an asset
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true
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a sale on account is paid for in cash when the merchandise is sold
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false
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a sales slip is usually prepared in multiple copies with the customer receiving the original and the business keeping the remaining copies
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true
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Sales taxes are not usually charged to government agencies
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True
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In a merchandising business, the most frequent type of transaction is the sale of merchandise
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True
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Electrical supply companies, auto parts distributors, and food supply companies are examples of wholesalers
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True
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Two of the accounts used by merchandising businesses are merchandise inventory and professional fees
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False
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The cash register tape is the source document for the journal entry to record the day's cash sales
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True
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Sales discounts is classified as a contra revenue account
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True
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A sales discount increases the revenue account sales
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False
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When a cash sale occurs, the details of the sale are printed on two tapes in the cash register at the same time
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True
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A cash discount is recorded at the time the sale is made
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False
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Bank card sales are processed the same way as the store's regular charge card sales
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False
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A cash discount is calculated on the total of a sales slip, including the sales tax
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False
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The most widely used bank card in North America is American express
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False
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A proof is usually prepared at the end of each day to show that the amount of cash in the cash register equals the amount of cash sales recorded on the cash register tape
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True
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A cash discount is an advantage only to the buyer because he or she is able to purchase the merchandise at a reduced cost
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False
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The normal balance side of the merchandise inventory account is a
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debit
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The normal balance side of the sales tax payable account is a
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credit
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the normal balance side of the sales discounts account is a
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debit
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the normal balance side of the sales account is a
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credit
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the increase side of the sales tax payable account is a
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credit
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the decrease side of the sales discounts account is a
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credit
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the decrease side of the sales tax payable account is a
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debit
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the decrease side of the sales account is a
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debit
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the decrease side of the merchandise inventory account is a
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credit
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the increase side of the sales discounts account is a
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debit
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the increase side of the sales account is a
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credit
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the increase side of the merchandise inventory account is a
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debit
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