A credit memorandum is used as documentation for a journal entry that requires a debit to a. Sales and a credit to Cash. b. Sales Returns and Allowances and a credit to Accounts Receivable. c. Accounts Receivable and a credit to a contra-revenue account. d. Cash and a credit to Sales Returns and Allowances.

A credit memorandum is used as documentation for a journal entry that requires a debit to a. Sales and a credit to Cash.
b. Sales Returns and Allowances and a credit to Accounts Receivable.
c. Accounts Receivable and a credit to a contra-revenue account.
d. Cash and a credit to Sales Returns and Allowances.
by

1 Answer

Answer :

d. Cash and a credit to Sales Returns and Allowances.
by

Related questions

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The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

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When goods are returned that relate to a prior cash sale, a. the Sales Returns and Allowances account should not be used. b. the cash account will be credited. c. Sales Returns and Allowances will be credited. d. Accounts Receivable will be credited.

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Speedy Bike Company received a $940 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $490 and a credit to Service Revenue $490. The correcting entry is a. debit Cash, $940; credit Accounts Receivable, $940. b. debit Cash, $450 and Accounts Receivable, $490; credit Service Revenue, $940. c. debit Cash, $450 and Service Revenue, $490; credit Accounts Receivable, $940. d. debit Accounts Receivable, $940; credit Cash, $450 and Service Revenue, $490.

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All of the following are contra revenue accounts except a. sales. b. sales allowances. c. sales discounts. d. sales returns.

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The collection of a $600 account within the 2 percent discount period will result in a a. debit to Sales Discounts for $12. b. debit to Accounts Receivable for $588. c. credit to Cash for $588. d. credit to Accounts Receivable for $588.

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The respective normal account balances of Sales, Sales Returns and Allowances, and Sales Discounts are a. credit, credit, credit. b. debit, credit, debit. c. credit, debit, debit. d. credit, debit, credit.

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The entry to record the receipt of payment within the discount period on a sale of $750 with terms of 2/10, n/30 will include a credit to a. Sales Discounts for $15. b. Cash for $735. c. Accounts Receivable for $750. d. Sales for $750.

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A Sales Returns and Allowances account is not debited if a customer a. returns defective merchandise. b. receives a credit for merchandise of inferior quality. c. utilizes a prompt payment incentive.

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In terms of liquidity, merchandise inventory is a. more liquid than cash. b. more liquid than accounts receivable. c. more liquid than prepaid expenses. d. less liquid than store equipment.

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. A credit memorandum is prepared when a. an employee does a good job. b. goods are sold on credit. c. goods that were sold on credit are returned. d. customers refuse to pay their accounts.

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Last Answer : d. all temporary accounts.

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Increase in the amount of bills receivable results in-------------- a) decrease in cash b) increase in cash c) no change in cash d) none of these

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The ratio which indicates how quickly debtors are converted into cash is--------- a) Receivable turnover ratio b) Inventory turnover ratio c) Working capital turnover ratio d) Creditors turnover ratio

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Hale Company sells merchandise on account for $1,500 to Kear Company with credit terms of 2/10, n/30. Kear Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? a. $1,470 b. $1,476 c. $1,200 d. $1,176

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Holt Company sells merchandise on account for $2,000 to Jones Company with credit terms of 2/10, n/30. Jones Company returns $400 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? a. $1,960 b. $1,968 c. $1,600 d. $1,568

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If a company is given credit terms of 2/10, n/30, it should a. hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time. b. pay within the discount period and recognize a savings. c. pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. d. recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.

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