A sales discount does not a. provide the purchaser with a cash saving. b. reduce the amount of cash received from a credit sale. c. increase a contra-revenue account. d. increase an operating expense account. A sales discount does not a. provide the purchaser with a cash saving. b. reduce the amount of cash received from a credit sale. c. increase a contra-revenue account. d. increase an operating expense account.

A sales discount does not
a. provide the purchaser with a cash saving.
b. reduce the amount of cash received from a credit sale.
c. increase a contra-revenue account.
d. increase an operating expense account.
by

1 Answer

Answer :

d. increase an operating expense account.
by

Related questions

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.

Description : 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. ... and a credit to a contra-revenue account. d. Cash and a credit to Sales Returns and Allowances.

Last Answer : d. Cash and a credit to Sales Returns and Allowances.

With respect to the income statement, a. contra-revenue accounts do not appear on the income statement. b. sales discounts increase the amount of sales. c. contra-revenue accounts increase the amount of operating expenses. d. sales discounts are included in the calculation of gross profit.

Description : With respect to the income statement, a. contra-revenue accounts do not appear on the income statement. b. sales discounts increase the amount of sales. c. contra-revenue accounts increase the amount of operating expenses. d. sales discounts are included in the calculation of gross profit.

Last Answer : d. sales discounts are included in the calculation of gross profit.

The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account.

Description : The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account.

Last Answer : b. contra asset account.

If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales a. discount. b. return. c. contra asset. d. allowance.

Description : If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales a. discount. b. return. c. contra asset. d. allowance.

Last Answer : b. return.

he journal entry to record a credit sale is a. Cash Sales b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales

Description : he journal entry to record a credit sale is a. Cash Sales b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales

Last Answer : d. Accounts Receivable Sales

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.

Description : 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.

Last Answer : c. Accounts Receivable for $750.

Closing entries a. are prepared before the financial statements. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. summarize the activity in every account.

Description : Closing entries a. are prepared before the financial statements. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. summarize the activity in every account.

Last Answer : c. cause the revenue and expense accounts to have zero balances.

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.

Description : 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.

Last Answer : a. debit to Sales Discounts for $12.

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

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

Last Answer : a. sales.

The Sales Returns and Allowances account does not provide information to management about a. possible inferior merchandise. b. the percentage of credit sales versus cash sales. c. inefficiencies in filling orders. d. errors in overbilling customers.

Description : The Sales Returns and Allowances account does not provide information to management about a. possible inferior merchandise. b. the percentage of credit sales versus cash sales. c. inefficiencies in filling orders. d. errors in overbilling customers.

Last Answer : b. the percentage of credit sales versus cash sales.

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.

Description : 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 ... Receivable, $940. d. debit Accounts Receivable, $940; credit Cash, $450 and Service Revenue, $490.

Last Answer : c. debit Cash, $450 and Service Revenue, $490; credit Accounts Receivable, $940.

Sales revenue a. may be recorded before cash is collected. b. will always equal cash collections in a month. c. only results from credit sales. d. is only recorded after cash is collected.

Description : Sales revenue a. may be recorded before cash is collected. b. will always equal cash collections in a month. c. only results from credit sales. d. is only recorded after cash is collected.

Last Answer : a. may be recorded before cash is collected.

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.

Description : 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 ... desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.

Last Answer : b. pay within the discount period and recognize a savings.

Which of the following would not be classified as a contra account? a. Sales b. Sales Returns and Allowances c. Accumulated Depreciation d. Sales Discounts

Description : Which of the following would not be classified as a contra account? a. Sales b. Sales Returns and Allowances c. Accumulated Depreciation d. Sales Discounts

Last Answer : a. Sales

The collection of a $900 account after the 2 percent discount period will result in a a. debit to Cash for $882. b. debit to Accounts Receivable for $900. c. debit to Cash for $900. d. debit to Sales Discounts for $18.

Description : The collection of a $900 account after the 2 percent discount period will result in a a. debit to Cash for $882. b. debit to Accounts Receivable for $900. c. debit to Cash for $900. d. debit to Sales Discounts for $18.

Last Answer : c. debit to Cash for $900.

The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.

Description : The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.

Last Answer : b. dividends account.

In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.

Description : In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.

Last Answer : b. each expense account will be credited.

Sales revenues are usually considered earned when a. cash is received from credit sales. b. an order is received. c. goods have been transferred from the seller to the buyer. d. adjusting entries are made.

Description : Sales revenues are usually considered earned when a. cash is received from credit sales. b. an order is received. c. goods have been transferred from the seller to the buyer. d. adjusting entries are made.

Last Answer : d. adjusting entries are made.

The Freight-in account a. increases the cost of merchandise purchased. b. is contra to the Purchases account. c. is a permanent account. d. has a normal credit balance

Description : The Freight-in account a. increases the cost of merchandise purchased. b. is contra to the Purchases account. c. is a permanent account. d. has a normal credit balance

Last Answer : a. increases the cost of merchandise purchased.

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.

Description : 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.

Last Answer : b. the cash account will be credited.

Which of the following accounts has a normal credit balance? a. Sales Returns and Allowances b. Sales Discounts c. Sales d. Selling Expense

Description : Which of the following accounts has a normal credit balance? a. Sales Returns and Allowances b. Sales Discounts c. Sales d. Selling Expense

Last Answer : c. Sales

West Company has the following account balances: Purchases $48,000 Sales Returns and Allowances 6,400 Purchase Discounts 4,000 Freight-in 3,000 Delivery Expense 4,000 The cost of goods purchased for the period is a. $52,000. b. $47,000. c. $51,000. d. $44,600.

Description : West Company has the following account balances: Purchases $48,000 Sales Returns and Allowances 6,400 Purchase Discounts 4,000 Freight-in 3,000 Delivery Expense 4,000 The cost of goods purchased for the period is a. $52,000. b. $47,000. c. $51,000. d. $44,600.

Last Answer : . $47,000.

A credit sale of $900 is made on July 15, terms 2/10, n/30, on which a return of $50 is granted on July 18. What amount is received as payment in full on July 24? a. $900 b. $833 c. $850 d $882

Description : A credit sale of $900 is made on July 15, terms 2/10, n/30, on which a return of $50 is granted on July 18. What amount is received as payment in full on July 24? a. $900 b. $833 c. $850 d $882

Last Answer : b. $833

A credit sale of $800 is made on April 25, terms 2/10, n/30, on which a return of $50 is granted on April 28. What amount is received as payment in full on May 4? a. $735 b. $784 c. $800 d $750

Description : A credit sale of $800 is made on April 25, terms 2/10, n/30, on which a return of $50 is granted on April 28. What amount is received as payment in full on May 4? a. $735 b. $784 c. $800 d $750

Last Answer : a. $735

In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Description : In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Last Answer : b. only when a credit sale of merchandise occurs.

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

Description : 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 ... is the amount of the check? a. $1,470 b. $1,476 c. $1,200 d. $1,176

Last Answer : d. $1,176

Company A sells $500 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? a. $350 b. $490 c. $450 d. $400

Description : Company A sells $500 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? a. $350 b. $490 c. $450 d. $400

Last Answer : b. $490

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

Description : 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 ... the amount of the check? a. $1,960 b. $1,968 c. $1,600 d. $1,568

Last Answer : d. $1,568

Company X sells $400 of merchandise on account to Company Y with credit terms of 2/10, n/30. If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check? a. $280 b. $392 c. $360 d. $320

Description : Company X sells $400 of merchandise on account to Company Y with credit terms of 2/10, n/30. If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check? a. $280 b. $392 c. $360 d. $320

Last Answer : b. $392

. If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the a. Merchandise Inventory account will be increased. b. Merchandise Inventory account will not be affected. c. seller will bear the freight cost. d. carrier will bear the freight cost.

Description : . If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the a. Merchandise Inventory account will be increased. b. Merchandise Inventory account will not be affected. c. seller will bear the freight cost. d. carrier will bear the freight cost.

Last Answer : a. Merchandise Inventory account will be increased.

Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Description : Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Last Answer : b. in operating expenses for the seller.

Ingrid’s Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company’s gross profit rate is 40%, Ingrid’s will report monthly net sales revenue and cost of goods sold of a. $38,000 and $22,800. b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Description : Ingrid's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Ingrid's will report monthly net sales revenue and cost of goods ... b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Last Answer : c. $37,200 and $22,320.

Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Description : Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Last Answer : b. $15,000.

Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Description : Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Last Answer : c. cost of goods sold, net sales revenue

Jake’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory a. increased by $19,208. b. increased by $19,700. c. increased by $19,306. d. increased by $19,308.

Description : Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. ... . b. increased by $19,700. c. increased by $19,306. d. increased by $19,308.

Last Answer : d. increased by $19,308.

Zach’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $50,000, terms 2/10, n/30. Returned $1,000 of the shipment for credit. Paid $250 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory a. increased by $48,020. b. increased by $49,250. c. increased by $48,265. d. increased by $48,270.

Description : Zach's Market recorded the following events involving a recent purchase of merchandise: Received goods for $50,000, terms 2/10, n/30. Returned $1,000 of the shipment for credit. Paid $250 freight on the shipment ... 020. b. increased by $49,250. c. increased by $48,265. d. increased by $48,270.

Last Answer : d. increased by $48,270.

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that a. the customer must pay the bill within 10 days. b. the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. c. the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. d. two sales returns can be made within 10 days of the invoice date and no returns thereafter.

Description : The credit terms offered to a customer by a business firm are 2/10, n/30, which means that a. the customer must pay the bill within 10 days. b. the customer can deduct a 2% discount if the ... date. d. two sales returns can be made within 10 days of the invoice date and no returns thereafter.

Last Answer : c. the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date.

Pick out the wrong statement. (A) Gross revenue is that total amount of capital received as a result of the sale of goods or service (B) Net revenue is the total profit remaining after deducting all costs excluding taxes (C) The ratio of immediately available cash to the total current liabilities is known as the cash ratio (D) Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

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Last Answer : (C) Working capital turnover ratio = sales/net working capital

Rent received by a company (whose main business is real estate) is classified as a) Investing activity b) Financing activity c) Operating activity d) Cash equivalent

Description : Rent received by a company (whose main business is real estate) is classified as a) Investing activity b) Financing activity c) Operating activity d) Cash equivalent

Last Answer : c) Operating activity

An account bag from the Head Office to Sub office contain a) The SO slip, b) A cash bag containing cash including postage stamps c) IPO, Saving certificate, for sales d) SB Slip (SB 27), BO daily account after check, Blank MO forms for sale e) All the above

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Last Answer : e) All the above

Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Description : Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Last Answer : b. cost of goods sold.

The operating cycle of a company is the average time that is required to go from cash to a. sales in producing revenues. b. cash in producing revenues. c. inventory in producing revenues. d. accounts receivable in producing revenues.

Description : The operating cycle of a company is the average time that is required to go from cash to a. sales in producing revenues. b. cash in producing revenues. c. inventory in producing revenues. d. accounts receivable in producing revenues.

Last Answer : b. cash in producing revenues.

What type of discount is given to a purchaser for performing activities such as transporting, storing, and selling? A)Quantity discount B)Cash discount C)Geographic discount D)Service discount E)Trade discount

Description : What type of discount is given to a purchaser for performing activities such as transporting, storing, and selling? A)Quantity discount B)Cash discount C)Geographic discount D)Service discount E)Trade discount

Last Answer : E)Trade discount

The operating expense section of an income statement for a wholesaler would not include a. freight-out. b. utilities expense. c. cost of goods sold. d. insurance expense

Description : The operating expense section of an income statement for a wholesaler would not include a. freight-out. b. utilities expense. c. cost of goods sold. d. insurance expense

Last Answer : d. insurance expense

The index of efficiency and profitability of the business a) Operating ratio b) Operating profit ratio c) Expense ratio d) Net profit ratio

Description : The index of efficiency and profitability of the business a) Operating ratio b) Operating profit ratio c) Expense ratio d) Net profit ratio

Last Answer : b) Operating profit ratio

ommon size Income Statement present the various items as a percentage of ---------------- a) Sales b) Credit sales c) Cash sales

Description : ommon size Income Statement present the various items as a percentage of ---------------- a) Sales b) Credit sales c) Cash sales

Last Answer : a) Sales

A sales invoice is a source document that a. provides support for goods purchased for resale. b. provides evidence of incurred operating expenses. c. provides evidence of credit sales. d. serves only as a customer receipt.

Description : A sales invoice is a source document that a. provides support for goods purchased for resale. b. provides evidence of incurred operating expenses. c. provides evidence of credit sales. d. serves only as a customer receipt.

Last Answer : c. provides evidence of credit sales.

At the beginning of April, Logan Enterprises had a $400 balance in the Supplies account. During the month, Logan purhchased additional supplies for $500. At April 30, the company had $350 of supplies on hand. The balance in the supplies expense account that will be closed to Income Summary is a. $350. b. $400. c. .$500. d. $550.

Description : At the beginning of April, Logan Enterprises had a $400 balance in the Supplies account. During the month, Logan purhchased additional supplies for $500. At April 30, the company had $350 of supplies on hand. The balance ... be closed to Income Summary is a. $350. b. $400. c. .$500. d. $550.

Last Answer : d. $550.

Which of the following is a true statement about closing the books of a corporation? a. Expenses are closed to the Expense Summary account. b. Only revenues are closed to the Income Summary account. c. Revenues and expenses are closed to the Income Summary account. d. Revenues, expenses, and the dividends account are closed to the Income Summary account.

Description : Which of the following is a true statement about closing the books of a corporation? a. Expenses are closed to the Expense Summary account. b. Only revenues are closed to the Income Summary ... account. d. Revenues, expenses, and the dividends account are closed to the Income Summary account.

Last Answer : c. Revenues and expenses are closed to the Income Summary account.