Term
| The Sales Discounts account has a normal debit balance. T/F |
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| Whenever a business purchases items on account, the purchase results in a debit to the Purchases account. |
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| The Purchases account is a temporary equity account. |
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| The cash payments journal is used to record all transactions that increase the Cash in Bank account |
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| A business keeps a record of the sales tax owed to the state in the liability account Sales Tax Payable. |
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Term
| A cash discount is an advantage to the buyer but not to the seller. |
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| Banks charge fees for handling a business's checking account and for processing its bankcard sales. |
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| The cost of shipping charges is debited to the Transportation In account. |
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| A major disadvantage of a special journal is that it requires more time to record and post business transactions. |
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| A business handles bankcard sales like cash sales because it receives cash from the bank within several days after depositing the bankcard slips. |
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| The due date is the date on which an invoice must be paid. |
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| The normal balance side of the Sales Returns and Allowances account is a credit. |
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| Governmental agencies, such as school district, are not usually subject to a sales tax. |
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| A processing stamp is a stamp placed on the PACKING SLIP indicating the amount to be paid. |
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Term
| The cash register tape is the source document for recording cash and bankcard sale transactions. |
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Term
| Check stubs and the bank statement are the source documents for the journal entries made in the cash payments journal. |
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Definition
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Term
| The Sales account is used to record merchandise sold during the period. |
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Term
| One example of a good internal control is the requirement that all cash payments be authorized. |
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Term
| Only customer accounts with balances are reported on the schedule of accounts receivable. |
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| A business does NOT have to write a check to the bank for service charges or bankcard fees because the fees are automatically deducted from the business's account. |
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Term
| When a business purchases merchandise, it debits the amount of the purchase to the MERCHANDISE INVENTORY account. |
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| A business may allow its customers to return unsatisfactory merchandise for full credit or to keep the merchandise at a lesser price. |
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Term
| The balance of a contra account INCREASES the balance in another account. |
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Term
| A diagonal line in the Posting Reference column indicated that an amount is to be posted to two accounts. |
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Term
| The rate of sales tax varies from state to state. |
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