Question

Given the following information, compute the amount of cash remitted by the customer on February 21.

Feb 14 - Sale on credit, terms of 1/15, n/30 - $12,000

Feb 19 - Allowance granted due to some items being damaged - $600

Feb 21 - Payment in full received from customer - ?????

a.$11,286

b.$12,000

c.$11,996

d.$11,400

Goods held on consignment for another company should be included in the inventory of the company holding the merchandise.

True

False

To record the sale of goods for cash in a perpetual inventory system:

	a.	only one journal entry is necessary to record cost of goods sold and reduction of inventory.
	b.	two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory.
	c.	two journal entries are necessary: one to record the receipt of cash and reduction of inventory, and one to record the cost of goods sold and sales revenue.
	d.	only one journal entry is necessary to record the receipt of cash and the sales revenue.

Answer 1

1. Answer: A ($ 11,286) Credit Date General journal Feb-14 Accounts receivables Sales revenue Debit $ 12,000 $ 12,000 600 Feb-19 Sales returns and allowances Accounts receivables $ 600 Feb-21 Cash Discount expense Accounts receivables $ $ 11,286 114 $ 11,400 Less: Less: Sales revenue Allowance Discount Amount to be collected 12,000 600 114 (12000-600)*1% 11,286 S FALSE Goods held on consignment for should be included in books of consignor; the inventory belongs to consignor; irrespective physical custody of inventory it should be included in consignor books

3. Answer: B Two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory. General journal Debit Credit XXX Accounts receivables Sales revenue XXX L XXX XXX Cost of goods sold Merchandise inventory XXX