Question

 The entry to record a return by a credit customer of defective merchandise on which no sales tax was charged includes

•   a debit to Sales and a credit to Sales Returns and Allowances.

•   a debit to Accounts Receivable and a credit to Sales Returns and Allowances.

•   a debit to Sales Returns and Allowances and a credit to Accounts Receivable.

•   a debit to Sales and a credit to Accounts Receivable.

 Which of the following statements is correct?

•  Under the accrual basis of accounting, revenue is recorded in the period in which it is earned..

•  Under the accrual basis of accounting, expenses are recorded in the period in which they are

•  incurred.

•  Both of the above statements are correct.

•  Neither of the aboye statements is correct.

 The entry to record a purchase of merchandise on credit includes

•  a credit to Purchases and a credit to Accounts Payable.

•  a debit to Accounts Payable and a credit to Purchases.

•  a debit to Purchases and a credit to Accounts Payable.

•  a debit to Purchases and a credit to Accounts Receivable.

 A firm had purchases of $16,200, freight charges of $300, and purchases returns and allowances of $1,100 during one month. Its net delivered cost of purchases was

•  $17,600.

•  $16,200.

•  $14,800.

•  $15,400.

 If a firm had sales of $50,000 during a period and sales returns and allowances of $4,000, its net sales were

•  $46,000.

•  $54,000.

•  $4,000.

•  $50,000.

Answer 1

1

To entry to record a return includes a debit to Sales Returns and Allowances and a credit to Accounts Receivable

Option C is correct

2

Under the accrual basis of accounting, revenue is recorded in the period in which it is earned.

Under the accrual basis of accounting, expenses are recorded in the period in which they are incurred.

Option C Both of the above statements are correct is correct option.

3

The entry to record purchase of merchandise on credit includes a debit to Purchases and a credit to Accounts Payable.

Option C is correct

4

Net delivered cost of merchandise = Purchases+Freight charges-Purchase returns and allowances = 16200+300-1100= $15,400

Option D is correct

5

Net sales = Sales-Sales return and allowances = 50000-4000 = $46,000

Option A is correct