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The fee paid by a retailer to a credit card company is considered a contra-revenue

The fee paid by a retailer to a credit card company is considered a contra-revenue account by the retailer.

 

 

52.Upon making a credit card sale, a business should record the sale as an accounts receivable until the customer pays his or her credit card bill.

 

 

53.When a business is able to deposit its credit card sales invoices directly into a special bank account, it debits Cash, not Accounts Receivable.

 

 

54.The use of major credit cards requires merchandisers to establish the customer's credit.

 

 

 

 

55.Under the periodic inventory system, when a merchandiser purchases goods on credit, it would debit Merchandise Inventory and credit Accounts Payable.

 

 

56.Good internal control dictates that key employees be rotated among different jobs.

 

 

57.At the end of each day, the cashier should be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

 

 

58.Management's authorization of transactions relates to a control activity in the accounting system.

 

 

59.Merchandising businesses do not need as good a system of internal control as service companies.

 

 

60.An effective system of internal control centralizes functions in a single, capable individual.

Jan 11 2020 View more View Less

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