Questions and Answers
What is the report that summarizes the cash and credit card sales of a point-of-sale terminal?
terminal summary
What is a report of credit card sales produced by a point-of-sale terminal?
batch report
What is a computer used to collect, store, and report all the information of a sales transaction?
point-of-sale terminal
What is credit allowed a customer for part of the sales price of merchandise that is not returned?
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What is the process of preparing a batch report of credit card sales from a point-of-sale terminal?
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What is a cash discount on sales taken by a customer?
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What is the sale in which a credit card is used for the total amount of the sale at the time of the transaction?
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What is a special journal used to record only cash receipt transactions?
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What is a form prepared by the vendor showing the amount deducted for returns and allowances?
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What is a special journal used to record only sales of merchandise on account?
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The amount of sales tax collected is an asset of the business until paid to the state government.
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When cash is received for a sale on account within the discount period, the amount credited to Accounts Receivable is reduced by the amount of discount.
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A terminal summary reports total cash and credit card sales of a point-of-sale terminal.
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Because Sales Discount is a contra account to Sales, it has a normal credit balance.
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Point-of-sale terminals use UPC symbols to obtain the description and price of merchandise sold.
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Regardless of when merchandise is sold, revenue should be recorded when cash is received.
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When a customer is granted credit for merchandise returned, Accounts Receivable is debited.
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Cash is proved when the total of the Cash Debit column of a cash receipts journal equals the next unused check stub.
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Purchases and sales of merchandise are the two major activities of a merchandising business.
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Sales for cash and credit cards are recorded as a single cash sales transaction.
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All sales of merchandise are recorded in a sales journal.
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Even though a company offers a sales discount, the customer is invoiced for the full sales amount plus sales tax on that amount.
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For weekly cash and credit card sales, the asset account Cash is debited for the total of sales and sales tax, but the revenue account Sales is credited only for the total of sales.
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Using a terminal summary as a source document for weekly cash and credit card sales is an application of the accounting concept.
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When merchandise is sold on account and sales tax is also collected:
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Sales discounts are recorded in a:
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Sales Returns and Allowances is:
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The amount of sales tax on a sale is calculated as the price of goods:
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The amount of cash received for a sale on account of $1,000.00 plus sales tax of $80.00 when the cash is received within the 2 percent discount period is:
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For a sale on account of $1,000.00 plus sales tax of $80.00, the amount recorded in the Accounts Receivable Debit column of a sales journal is:
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Sales invoices should be:
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Recording revenue from transactions at the time goods or services are sold is an application of the accounting concept:
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Credit terms of 2/10, n/30 mean that if the account is paid in:
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Study Notes
Point-of-Sale Reports
- Terminal Summary: Summarizes cash and credit card sales of a point-of-sale terminal.
- Batch Report: A specific report produced that details credit card sales from a point-of-sale terminal.
Point-of-Sale Systems
- Point-of-Sale Terminal: A computer that collects, stores, and reports sales transaction information.
- Batching Out: The process of preparing a batch report of credit card sales.
Sales Transactions and Adjustments
- Sales Allowance: Credit provided to customers for merchandise not returned, decreasing vendor's accounts receivable.
- Sales Discount: Cash discount on sales that a customer can take advantage of.
Journals and Documentation
- Cash Receipts Journal: A specialized journal for recording only cash receipt transactions.
- Sales Journal: A dedicated journal for recording sales of merchandise on account.
- Credit Memorandum: Document prepared by a vendor to indicate the amount deducted for returns and allowances.
Accounting Principles and Concepts
- Sales Tax: Not considered an asset until paid to the government, contradicting the true/false statement.
- Revenue Recognition: Revenue should be recorded when earned, not solely when cash is received.
True/False Statements
- Cash and credit card sales recorded as a single transaction true; sales discount decreases amount credited to Accounts Receivable false.
- Sales discounts are contra to sales yet have a normal debit balance, inconsistent with typical accounts.
Key Accounting Terms
- Accounts Receivable: Increases with merchandise sold on account along with sales tax collection.
- Sales Returns and Allowances: Classified as a contra revenue account, affecting overall revenue figures.
Sales Calculations
- Sales tax is calculated by multiplying the price of goods by the sales tax rate.
- For sales on account, the cash received within a discount period is lower than the total due, reflecting applied discounts.
Credit Terms Interpretation
- Credit terms such as 2/10, n/30 indicate a 2% discount if paid within 10 days, with the full amount due in 30 days.
Sales Invoicing Practices
- Sales invoices should be numbered sequentially, prepared in triplicate, and utilized as source documents for sales made on account.
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Description
Prepare for your upcoming test with these flashcards covering key concepts from Accounting Chapter 10. Each card defines essential terms related to point-of-sale transactions and reporting. Use these to enhance your understanding and retention of important accounting terminology.
