Question 1

Which of the following accounts normally has a credit balance?

Accepted Answer

C

Question 2

Individual amounts in the Accounts Receivable Credit column of a cash receipts journal are

Accepted Answer

Individual amounts in the Accounts Receivable Credit column of a cash receipts journal are posted daily to the accounts receivable ledger, as they reflect the amounts received from customers on a daily basis. The accounts receivable ledger contains detailed information about each customer's account balance, and posting these amounts daily allows companies to keep track of their accounts receivable and ensure that they are collecting payments in a timely manner. The general ledger is a summary of all the company's accounts, and therefore individual amounts are not typically posted directly to it from a cash receipts journal.

Question 3

Which of the following journals has end-of-the-month postings?

Accepted Answer

All special journals, including the cash payments journal, purchases journal, sales journal, and cash receipts journal, typically have end-of-the-month postings. This is a common accounting practice to summarize and transfer the month's transactions to the general ledger.

Question 4

When a general journal and four special journals are in use, the entries in the Cash account will generally be posted from

Accepted Answer

The answer of When a general journal and four special...

Question 5

The Credit Card Expense column would most likely be found in

Accepted Answer

The answer of The Credit Card Expense column would most...

Question 6

An (X) at the bottom of an Other Accounts column indicates that the total

Accepted Answer

An (X) at the bottom of an Other Accounts column indicates that the total is not to be posted because the figures have already been posted separately to their respective accounts.

Question 7

Accounts Payable would appear as a debit in

Accepted Answer

Accounts Payable would appear as a debit in the cash payments journal because this journal records transactions where the company is paying off its liabilities, including accounts payable.

Question 8

The cash payments journal is used for transactions involving

Accepted Answer

The answer of The cash payments journal is used for...

Question 9

The entry to purchase a one-year insurance policy for cash would be recorded in the cash payments journal in the

Accepted Answer

The correct entry for purchasing a one-year insurance policy for cash involves decreasing cash (a credit to Cash) and increasing an expense or prepaid asset (a debit to Insurance Expense or Prepaid Insurance, which falls under "Other Accounts"). This is accurately reflected in option B, where the Other Accounts Debit column records the increase in expense or asset, and the Cash Credit column records the decrease in cash.

Question 10

Which of the following is not posted daily when using special journals?

Accepted Answer

The answer of Which of the following is not posted...

Question 11

Column titles for a cash receipts journal may be

Accepted Answer

The column titles in a cash receipts journal typically include Cash Debit, Sales Discounts Debit, Sales Credit, Accounts Receivable Credit, and Other Accounts Credit. This allows for the recording of cash received, reductions in sale prices due to discounts, the actual sales amount, the amount received on credit, and any other credits received. Option B reflects this format.

Question 12

Carlyle Company sold goods for $425 plus a 7 percent sales tax to a customer using a bank credit card. The bank deducts a 3 percent discount. Carlyle Company debits Cash for

Accepted Answer

Firstly, we need to calculate the amount of sales tax: 
$425 x 7% = $29.75

Then, we can calculate the total sale amount: 
$425 + $29.75 = $454.75

Since the bank deducts a 3% discount, we can calculate the discount amount: 
$454.75 x 3% = $13.64

Finally, we can calculate the amount Carlyle Company receives after the discount is deducted: 
$454.75 - $13.64 = $441.11

Therefore, Carlyle Company debits Cash for $441.11.

Question 13

Baylor Company purchased merchandise on account, $3,000, with terms 2/10, n/30. The entry required of Baylor Company to record the transaction in the cash payments journal, assuming payment is made within the discount period, is

Accepted Answer

When Baylor Company pays within the discount period, they take advantage of the 2% discount. Therefore, they debit Accounts Payable for the full amount of $3,000, credit Purchases Discounts for $60 (2% of $3,000), and credit Cash for the remaining $2,940.

Question 14

The amount of discount to be recorded if the invoice is paid within the discount period on a purchase of goods having a list price of $1,600, subject to a trade discount of 25 percent with terms 2/10, n/30, is

Accepted Answer

The answer of The amount of discount to be recorded...

Question 15

Barnes Company purchased merchandise on account, $3,500, with terms 3/10, n/30. The entry required of Barnes Company to record the transaction in the cash payments journal, assuming payment is not made within the discount period, is

Accepted Answer

Since the payment is not made within the discount period, the full amount of $3,500 is paid without taking any discount. Therefore, the entry is to debit Accounts Payable and credit Cash for the full invoice amount of $3,500.

Question 16

A business sells merchandise, $700, plus 6 percent sales tax, and the customer used a bank charge card. The discount charged by the bank is 4 percent of the total of sales plus sales tax. The amount recorded in the Sales Tax Payable Credit column is

Accepted Answer

The sales tax is 6% of $700, which is $42.00. This is the amount recorded in the Sales Tax Payable Credit column.

Question 17

The Sales Discounts account

Accepted Answer

Sales discounts are generally treated as deductions from the gross revenue or sales on the income statement. Therefore, the Sales Discounts account has a normal debit balance and is subtracted from gross sales to arrive at net sales on the income statement.

Question 18

Sales Discounts would appear as a Debit column in which special journal

Accepted Answer

The answer of Sales Discounts would appear as a Debit...

Question 19

Which of the following accounts normally has a debit balance?

Accepted Answer

Sales Discounts is a contra account to Sales and therefore has a debit balance. The other accounts listed normally have credit balances.

Question 20

A business sells merchandise, $600, on account with terms of 1/15, n/60. The customer pays within the discount period. The amount recorded in the Cash Debit column is

Accepted Answer

The customer qualifies for a 1% discount ($600 x 0.01 = $6) if payment is made within 15 days. Therefore, the amount due would be $600 - $6 = $594. Since the customer paid within the discount period, the amount recorded in the Cash Debit column would be $594.

Quiz 10: Cash Receipts and Cash Payments