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Chapter 7: Accounting for Sales, Accounts Receivable and Cash Receipts

Terms in this set (10)

A firm that sells goods that it purchases for re-sale is a
merchandising business
A sale of merchandise with no sales tax on credit is recorded as a
debit to Accounts Receivable and a credit to Sales
The acceptance of a return of merchandise from a credit customer with no sales tax is recorded a
debit to Sales Returns & Allowances and a credit to Accounts Receivable
The sale of merchandise with no sales tax for cash is recorded as a
debit to Cash and a credit to Sales
The sale of merchandise on credit with 9% sales tax will include
a credit to Sales Tax Payable
An allowance given for damaged merchandise is recorded in the
Sales Returns and Allowances account
Sales Discounts is
a contra-revenue account
A large retail firm, such as Kohl's, would not use a subsidiary ledger
False
A sale of merchandise for $1,500 with trade discounts of 20% and 10% would include a credit to sales of
$1,080
The Sales account is classified as
revenue account
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