True/False Questions 1. Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise are called sales allowances. 2. All sales, for cash or on...

1. Reductions in the price of merchandise granted by the seller because of defects or other problems with the merchandise are called sales allowances.

2. All sales, for cash or on credit, can be recorded in the general journal.

3. Sales Tax Payable is a liability account that is credited for the amount of tax imposed on sales.

4. Sales Returns and Allowances is debited for the amount of the sale, including the sales tax on that amount.

5. Cash discounts are offered to encourage prompt payment by customers who buy on account.