Question

3. Which of the following is recorded in the cash payments journal? a. adjusting entry for accrued salaries b. receipt of cash on supplies returned c. receipt of cash from services rendered d. payment of employees' salaries 4. When posting the column totals of a cash payments journal, a debit should be posted to a. Cash b. Accounts Payable c. Sales Discounts d. Unearned Revenue 5. Generally, the revenue account for a merchandising business is entitled a. Sales b. Net Sales c. Gross Sales d. Gross Profit $960 6,370 6. Using the following information, what is the amount of gross profit? Purchases $32,000 Purchases discounts Merchandise inventory 5,700 Merchandise inventory September 1 September 30 Sales returns and 910 Sales allowances Purchases returns and 1,200 Freight In allowances 63,000 1,040 a. 34,870 b. 31,880 c. 27,460 d. 62,090 7. Using the following information, what is the amount of merchandise available for sale? $32,000 5,700 $960 6,370 Purchases Merchandise inventory September 1 Sales returns and allowances Purchases returns and allowances Purchases discounts Merchandise inventory September 30 Sales 910 63,000 1,200 Freight In 1.040 a. b. c. d. 35,540 36,580 37,700 34,500

Answer 1

3. Answer: d. payment of employees’ salaries

The adjusting entry for accrued salaries is recorded in the general journal while the receipt of cash on supplies returned and from services rendered is recorded in the cash receipts journal. The payment of employees’ salaries is a cash payment and is hence recorded in the cash payments journal.

4. Answer: c. Sales Discounts

The cash account will be credited. The accounts payable column total will be debited to the accounts payable control account while individual amounts will be posted to the AP subsidiary ledger accounts. Unearned revenue will not appear in the cash payments journal but in the cash receipts journal when the cash is received and in the general journal for the adjusting entry.

5. Answer: a. Sales

A merchandising business will generally have a sales revenue account. The net sales, gross sales, and gross profit are amounts that are computed considering other transactions such as discounts, returns, cost of goods sold, etc.

6. Answer: b. $31,880

7. Answer: b. $36,580

Please see the below working for answers to 6. And 7.

Sales		63,000
Less: Sales returns and allowances		910
Net sales			62090
Cost of goods sold:
Merchandise inventory, September 1		5,700
Add:
Purchases	32,000
Freight-in	1,040
Less:
Purchases returns and allowances	1,200
Purchases discounts	960
Net purchases		30,880
Cost of goods available for sale		36,580
Less: Merchandise inventory, September 30		6,370
Cost of goods sold			30,210
Gross profit $			31,880