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Zach returned $195 of merchandise to Secret Trails. His original purchase was $400, with t

Zach returned $195 of merchandise to Secret Trails. His original purchase was $400, with t

Zach returned $195 of merchandise to Secret Trails. His original purchase was $400, with terms 1/10, n/30. If Justin pays the balance of his account after the discount period, how much should he pay?

A) $202.95

B) $205.00

C) $195.00

D) $400.00

 

22) The arrangements between buyer and seller as to when payments for merchandise are to be made are called

A) credit terms.

B) net cash.

C) cash on demand.

D) gross cash.

 

23) A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause

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

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

C) the sales discount account to be understated.

D) the sales account to be overstated.

 

24) Merchandise sold on credit was returned for credit and recorded with a debit to Sales Returns and Allowances and a credit to Accounts Payable. This error will cause

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

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

C) the assets to be overstated.

D) the liabilities to be understated.

25) The document indicating to the customer that the seller is reducing the amount owed by the customer is

A) credit memorandum.

B) sales discount.

C) sales returns and allowances.

D) schedule of accounts receivable.

 

26) Sold merchandise on account would be recorded with

A) a debit to an asset account.

B) a debit to a liability account.

C) a debit to Capital.

D) None of these are correct.

 

27) Customer returned merchandise for credit. This will be recorded with

A) a debit to an asset account.

B) a debit to a liability account.

C) a credit to an asset account.

D) None of these are correct.

 

28) A wholesale customer returned merchandise having already paid for it within the cash discount period. The return will be recorded with

A) a credit to an asset account.

B) a credit to a liability account.

C) a credit to Capital.

D) None of these are correct.

 

29) The total of all cash sales and credit sales equals

A) net sales.

B) gross sales.

C) sales discount.

D) sales returns and allowances.

30) Logan's Art studio was moving and sold furniture that was no longer needed for cash. The entry would include

A) a credit to Sales.

B) a debit to Sales.

C) a credit to Furniture.

D) a debit to Furniture

Tripti 06-Dec-2019

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