Question

21. Cosmos Company on July 15 sells merchandise on account to Cajon Co. for $6,000, terms 2/10, n/30. On July 20 Cajon Co. returns merchandise worth $1,000 to Cosmos Company. On July 24 payment is received from Cajon Co. for the balance due. What is the amount of cash received? a. $4,800 b. $4,900 c. $5,000 d. $6,000 22.Which of the following would require a compound journal entry? a. To record merchandise returned that was previously purchased on account. b. To record sales on account. c. To record purchases of inventory when a discount is offered for prompt payment. d. To record collection of accounts receivable when a cash discount is taken. abong 23.When an account becomes uncollectible and must be written off, Allowance for Doubtful Accounts should be credited. b. Accounts Receivable should be credited c. Bad Debt Expense should be credited. d. Sales Revenue should be debited. a. 0 24. In a perpetual inventory system, cost of goods sold is recorded 00.T 08 on a daily basis. b. on a monthly basis. a. c. on an annual basis. d. with each sale. 25. Two methods of accounting for uncollectible accounts are the allowance method and the accrual method. b. a. allowance method and the net realizable method. direct write-off method and the accrual method. d. c. direct write-off method and the allowance method. 26. Bad Debt Expense is reported on the income statement as part of cost of goods sold. b. reducing gross profit. c. an operating expense. d. a contra-revenue account. a. 27. Under GAAP, companies can choose which inventory system? LIFO FIFO a. Yes b. Yes No Yes Yes c. No d. No No

Answer 1

21. $4,900

2% if the buy purchases it within ten days. Therefore, 6000-1000=5000

5000*2/100= 100

5000-100=4900.

22. a. To record merchandise returned which was previously purchased on account, since a compound JE is one that there is more that one debit or credit or both of these.

23.b. accounts receivables should be credited.

24.d. with each sale.