Question : 55.Which of the following describes Sales Tax Payable? A. A revenue account : 1169400

 

 

55.Which of the following describes Sales Tax Payable?   

A. A revenue account with a normal credit balance.

 

B. A liability account with a normal debit balance.

 

C. A liability account with a normal credit balance.

 

D. An asset account with a normal debit balance.

 

 

 

 

56.Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:   

A. Debit Accounts Payable

 

B. Credit to Purchase Returns and Allowances

 

C. Debit to Account Receivable

 

D. Debit Sales Returns and Allowances

 

 

 

 

57.On the Income Statement, Sales Returns and Allowances have the effect of   

A. increasing total revenue.

 

B. increasing total expenses.

 

C. decreasing total revenue.

 

D. decreasing total expenses.

 

 

 

 

58.An example of a merchandising company is a   

A. bookstore.

 

B. restaurant.

 

C. hair salon.

 

D. real estate office.

 

 

 

 

59.Hour Place Clock Shop sold a grandfather clock for $2,250 subject to a 9% sales tax. The entry in the sales journal will include a debit to Accounts Receivable for   

A. $2,250.00.

 

B. $2,092.50.

 

C. $2,452.50.

 

D. $2,362.00.

 

 

 

60.Hour Place Clock Shop sold a grandfather clock for $2,250 subject to a 9% sales tax. The entry in the sales journal will include a credit to Sales for   

A. $2,250.00.

 

B. $2,092.50.

 

C. $2,452.50.

 

D. $2,362.00.

 

 

 

 

61.Which of the following describes Sales Returns and Allowances?   

A. A revenue account with a normal credit balance.

 

B. An expense account with a normal debit balance.

 

C. A contra revenue account with a normal debit balance.

 

D. A contra expense account with a normal credit balance.

 

 

 

 

62.The amount of the trade discount taken by the customer is recorded as a(n)   

A. asset.

 

B. liability.

 

C. expense.

 

D. sales recorded net of trade discounts.

 

 

 

 

63.Kay Sadia sold merchandise for $8,750 subject to a 6% sales tax. The entry in the sales journal will include a debit to Accounts Receivable for   

A. $9,275.00.

 

B. $8,225.00.

 

C. $8,750.00.

 

D. $8,462.00.

 

 

 

64.JCPenney issues its own credit cards to its customers who have established credit with them. It’s customers used these cards to charge $300 worth of sales. JCPenney would record these sales by:   

A. debitingCash $300 and crediting Sales $300.

 

B. debitingSales $300 and crediting Accounts Receivable $300.

 

C. debitingCharge Card Sales $300 and crediting Sales Returns and Allowances $300.

 

D. debitingAccounts Receivable $300 and crediting Sales $300.

 

 

65.Many retailers accept bank credit cards. Review the statements below and identify the statement that is incorrect regarding bank credit cards.   

A. Accounts Receivable will be debited when recording bank credit card sales.

 

B. Banks charge the business a fee, called a discount for processing the sale.

 

C. The Cash account will be debited for the total amount involved in the daily deposit of the credit card sales slips.

 

D. The most widely accepted bank credit cards are MasterCard and Visa.