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Exam 7: Accounting for Sales and Accounts Receivable

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Question 51

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Selected balances from the general ledger of the Loren Company on March 31, 2019, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended March 31, 2019. $\begin{array}{ll}\text { Sales } & \$ 16,250 \\\text { Accounts Receivable } & 6,250 \\\text { Sales Returns and Allowances } & 1,550 \\\text { Sales Tax Payable } & 68\end{array}$

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THE LOREN ...

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Question 52

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Which of the following describes Sales Tax Payable?

A) A revenue account with a normal credit balance.
B) A liability account with a normal credit balance.
C) An asset account with a normal debit balance.
D) A liability account with a normal debit balance.

E) A) and D)
F) A) and C)

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Question 53

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Selected balances from the general ledger of the All Star Video Rentals on July 31, 2019, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended July 31, 2019. $\begin{array}{l|l}\text { Accounts Receivable } & \$ 12,500 \\\hline \text { Sales Tax Payable } & 1,475 \\\hline \text { Sales } & 32,500 \\\hline \text { Sales Returns and Allowances } & 3,100\end{array}$

A wholesale firm made sales with the following list prices and trade discounts. Calculate the amount the firm will use to record each sale in the sales journal. Show your calculation. Round your answers to the nearest dollar. A. List price of $2,300 and trade discount of 40 percent. B. List price of $3,500 and trade discounts of 25 and 15 percent.

A(n)________ journal is a journal that is used to record only one type of transaction.

Match the description with the accounting terms.

One of the customer accounts from the accounts receivable ledger for Toulouse Company is shown below. Explain each of the entries that have been posted to this customer's subsidiary ledger account.

A list of all unpaid balances in the accounts receivable subsidiary ledger is called a(n)________ of accounts receivable.

On Deck Sports Memorabilia store sells a Babe Ruth rookie card for $10,500 on account. If the sales tax on the sale is 7%, what is the amount debited to Accounts Receivable.

The Sales Returns and Allowances account is classified as

A wholesale firm sold merchandise with a list price of $1,800 and trade discounts of 30 and 15 percent. What amount will be credited to sales in the sales journal?

The sales journal for Carothers Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

For each of the transactions listed below, select the journal that should be used to record the transaction. Use CR for cash receipts journal, CP for cash payments journal, S for sales journal, P for purchases journal, and G for general journal. -Received an additional cash investment from the owner

ABC Company uses special journals. When making a credit sale of $700 to a customer, the company would record the sale by:

Merchandise is sold on credit for $900 plus 5% sales tax. The entry in the sales journal will include a credit to Sales for

The accounts receivable ledger for Acme Auto Parts is shown below. Prepare a schedule of accounts receivable as of March 31, 2019.

The balances of selected accounts of Casper Company on February 28, 2019, were as follows: Sales $200,000 and Sales Returns and Allowances $5,000. The firm's net sales are subject to an 8 percent sales tax. Record the payment of the sales tax payable on February 28, 2019 on page 8 of a general journal.

Kay Sadia sold merchandise for $15,200 subject to a 7% sales tax. The entry in the sales journal will include a credit to Sales tax payable for

All That Jazz Music Store had the following transactions during the month of August 2019. Record the transactions on page 15 of a sales journal and page 18 of a general journal. Total, prove, and rule the sales journal as of August 31. Aug. 5 Sold a violin to Jim Stombres. Issued Sales Slip 515 for $6,500 plus sales tax of $325. 6 Sold a trombone to Kevin Folk. Issued Sales Slip 516 for $1,800 plus sales tax of $90. 8 Gave Jim Stombres an allowance for scratches on his violin sold on August 5, Sales Slip 515. Issued Credit Memorandum 318 for $105, which includes $5.00 of sales tax. 15 Sold a trumpet to Jason Streng. Issued Sales Slip 517 for $2,500 plus sales tax of $125. 20 Sold a synthesizer to Samuel Jacks. Issued Sales Slip 518 for $175 plus sales tax of $8.75. 25 Accepted a return of a defective synthesizer from Samuel Jacks. The synthesizer was originally sold on August 20, Sales Slip 518. Issued Credit Memorandum 319 for $183.75, which includes sales tax of $8.75.