5.4 Journalize transactions for the sale of inventory
1) Sales Discounts and Sales Returns and Allowances are contra-accounts of the Sales account.
2) Debit card and credit card sales are counted as cash transactions.
3) A debit memorandum acknowledges the receipt of returned goods from a customer.
4) The account Sales Returns and Allowances is debited when items are returned from a customer.
5) Cost of Goods Sold is the account that is matched with the Sales account to record the company's cost of the inventory that was sold under a perpetual inventory system.
6) A journal entry that involves more than two accounts is called a compound journal entry.
7) Under a periodic inventory system, when goods are returned by a customer the inventory account is not adjusted.
8) A customer purchased items on account from ABC Company. After a few days, the customer returned the goods. ABC will issue a:
A) debit memorandum.
B) return receipt.
C) credit memorandum.
D) refund cheque.
E) new invoice.
9) A list of credit customers is called a(n):
A) accounts payable subsidiary ledger.
B) general ledger.
C) accounts receivable subsidiary ledger.
D) general journal.
E) accounts receivable trial balance.
10) Sales returns from a customer:
A) increase Cost of Goods Sold.
B) increase Revenue.
C) decrease Cost of Goods Sold.
D) have no effect on Cost of Goods Sold.
E) increase operating expenses.