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Creating, recording and posting a credit memorandum for returned sales when PST, GST, or H

Creating, recording and posting a credit memorandum for returned sales when PST, GST, or H

Creating, recording and posting a credit memorandum for returned sales when PST, GST, or HST is included.

 

1) Sue's Jewelry sold 25 necklaces for $25 each to a credit customer. The invoice included HST at 13% and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the return would include

A) a debit to Sales Returns and Allowances for $141.25.

B) a debit to Sales Returns and Allowances for $125.00.

C) a credit to Sales Tax Payable for $16.25.

D) a debit to Accounts Receivable for $141.25.

 

2) A credit memorandum decreases which account on the seller's books?

A) Accounts Payable

B) Purchases Returns and Allowances

C) Sales Returns and Allowances

D) Accounts Receivable

3) Use the following information to answer the questions below:

 

Sales$73,400

HST Collected9,542

Sales Discount1,500

Sales Returns and Allowances900

Delivery Expense700

 

The Net Sales are ________________.

 

4) Calculate gross sales:

 

Net sales = $75,000

HST charged = $14,300

Sales returns and allowances - $15,000

Sales discounts - $20,000

Accounts receivable - $12,000

 

10.3   Journalizing purchase transactions that include GST or HST in the purchases journal.

 

1) Secret Trails received payment in full within the credit period for boarding for $800 plus 13% HST. Terms of the sale were 2/10, n/30. Which entry is required to record this transaction?

A) Debit Accounts Receivable, $800; credit Sales, $800

B) Debit Cash, $888; credit Accounts Receivable, $888

C) Debit Cash, $784; credit Sales, $784

D) Debit Cash, $904; credit Sales, $904

 

2) Sales discounts are not taken on which of the following?

A) HST added

B) Freight

C) Merchandise returned

D) Sales Discounts are not taken on any of the above.

3) Sold Merchandise for Cash subject to a provincial sales tax. This will be recorded with

A) a credit to an asset account.

B) a debit to a liability account.

C) a credit to Capital.

D) None of these are correct.

 

4) Sue's Jewelry sold 25 necklaces for $25 each to a credit customer. The invoice included a 5% provincial sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the payment if it was received after the discount period would include

A) a credit to Cash for $555.00.

B) a debit to Cash for $500.00.

C) a credit to Accounts Receivable for $525.00.

D) a credit to Accounts Receivable for $550.00.

 

5) The collection of an invoice for $5,000 plus HST of 13% within the 2/10 n/30 discount period was recorded using a 3% discount rather than a 2% discount in both the controlling and subsidiary accounts. This error will cause

A) the net income for the period to be understated.

B) the net income for the period to be overstated.

C) the control account to not agree with the subsidiary ledger.

D) the assets to be overstated.

 

6) Sales discounts are usually allowed only on

A) credit sales plus GST/HST.

B) freight.

C) credit sales to customers.

D) credit sales plus PST.

Tripti 06-Dec-2019

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