Sales & Cash Receipts

Mr. Calkins

Accounting I

Spring 2008

CHAPTER 14

SALES & CASH RECEIPTS

PART I: DIRECTIONS: Fill in the answer blank with the correct letter of best choice available.

a) Account Receiveb) BankcardC) Cash Discountd) Cash Receipt

e) Cash Salef) Charge Customerg) Controlling Acct.h) Contra Account

i) Credit Cardj) Credit Memok) Credit Termsl) Inventory

m) Merchandisen) Merchandising Businesso) Receiptp) Retailer

q) Sale on Acctr) Saless) Sales Allowanet) Sales Discount

u) Sales Returnv) Sales Slipw) Sales Taxx) Subsidiary Ledger

y) wholesaler

1)A business that buys goods and then sells those goods to customers for a profit is called a(n)____.

2)____A reduction in the sales price of an item that is given to a customer for prompt payment is a

______or ______.

3)____The customer to whom a sale on account is made is called a(n)______.

4)____A(n) ______occurs when a customer buys an item with a promise to pay for it later.

5)A business that sells to the final user is known as a ______.

6)Charge customers often use a(n)______when they make a purchase on account.

7) A levy imposed by most states on the retail sales price of goods and services is a(n)______.

8) Full credit or a cash refund granted by a merchant to a customer for unsatisfactory merchandise is

a(n)______.

9) Refers to the items of merchandise a business has in stock.

10) The balance of a(n)_____must agree with the balance of the accounts in related subsidiary

ledger.

11) A price reduction offered to a customer who keeps damaged or defect merchandise is a(n)______.

12)___ ______set out the time period for a customer to make full payment of an invoice.

13)____A(n)______is a source document prepared by the seller to notify a charge customer the

customer’s account will be decreased by the amount of a return or allowance.

14) ____A(n) refers to cash that is received by a business.

15) ____A(n)______is a form that lists the details of a sale: the date of the sale, the name of the

customer, and the description, quantity, and price of the goods sold.

16) __ ______are the goods a business buys fro resale to its customers.

17) __When a customer pays for merchandise in full at the time of purchase, the transaction is

called a ______.

18) __A(n) ______contains accounts for all charge customers.

19) __A form that serves as a record of cash received from a charge customer is called a ______.

20) __A ledger or book of accounts that is summarized in a controlling account in the general ledger is

called a(n)______.

21) __A business that sells to retailers is called a(n) ______.

22) __A(n)______is issued by a bank and is honored by many businesses.

PART II

DIRECTIONS: On September 22 IlluminationsLightingCenter sold $6,400 in merchandise on account to Sunshine Builders, a charge customer. A 5% sales tax applied to the sale. The date of the sales slip was September 22 and the credit terms were 2/10, n/30. (SHOW YOUR WORK)

1)What is the last day Sunshine Builders can pay the invoice and still receive a discount?

2)What would be the amount of the discount?

3)What amount would Sunshine Builders pay if it sends a check to IlluminationLightingCenter on or before the discount date?

4)What would the amount credited to Sunshine Builders account if it pays with the discount period?

5)What is the last day to pay the net amount of the invoice?

PART III

DIRECTIONS: Record the following transactions on page 26 of the general journal provided.

June 1) Sold on account to Ariana Marquez merchandise worth $1,750.00 plus sales tax of $87.50, Sales Slip 422.

7)Received a check from Mariner High Schoool to apply on account, $275.00, Receipt 523.

11) Issued Credit Memo 113 to Ariana Marquez for the return of merchandise originally sold on account, $150.00 plus sales tax of $7.50.

17)Sold Merchandise on account to GTS Inc., $2,400.00 plus $120.00 in sales taxes, Sales

Slip 423. Credit terms were 2/10, n/30.

25)Revived a check for $1,000.00 from Ariana Marquez to apply on account, Receipt 524.

27)Received a check from GTS Inc. for $2,472.00 in payment of its account balance of $2,520.00 less a 2 percent cash discount of $48.00, Receipt 525.

29)Sold merchandise on account to MarinerHigh School for $750.00, Sales Slip 424.

30)Cash sales for the period totaled $1,152.00 plus $57.60 in sales taxes, Tape 630.

30)Bankcard sales for the period totaled $4,594.00, plus sales taxes of $229.75, Tape 630

DATE / DESCRIPTION / POST
REF / DEBIT / CREDIT
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GENERAL JOURNAL

PART IV

DIRECTIONS::Using the general journal completed in Part 3 post each amount to the general and subsidiary ledger accounts provided.

GENERAL LEDGER

ACCOUNT______ACCOUNT NO.______