Question

Does sales discount increase sales revenue?

Select one:

a. False

b. True

What is usually the title of the revenue account on the income statement of a merchandising business?

Select one:

a. Fees Earned

b. Gross Profit

c. Sales

The sales section on a multiple-step income statement includes:

Select one:

a. sales, sales discounts, gross profit, sales returns and allowances

b. sales, sales discounts, sales returns and allowances

c. sales, sales returns and allowances, cost of goods sold, gross profit

d. sales, gross profit, cost of goods sold, sales discounts

The excess of sales over cost of goods sold is identified as:

Select one:

a. Gross Profit

b. Net Loss

c. Cost of Goods Available for Sale

d. Net Income

What journal entries are made when a business sells merchandise for cash?

Select one:

a. One entry with debit cash and credit sales. Another entry with debit merchandise inventory and credit cost of goods sold.

b. One entry with a debit to cash and a credit to sales. Another entry with a debit to cost of goods sold and credit to merchandise inventory.

c. One entry with a debit to cash and credit to cost of goods sold. Another entry with debit sales and credit merchandise inventory.

Answer 1

Part 1) OPTION A----- False

Sales discount decreases sales revenue.

Part 2)OPTION C---- Sales

Sales term is used for revenue for merchandising business I.e sale o product or service

Part 3)Option B----- Sales, sales discount , sales return and allowances

Sales section would include above mentioned.

Part 4)OPTION A----- Gross Profit

Since, Net Sales - COGS = Gross Profit

Part 5) Option B-----one entry with debit to cash and credit to sales.Anither entry with debit to cost of goods sold and credit to merchandise inventory.

Since on selling goods, cash is received hence debited and revenue is recognized hence sales credited. And COGS expensed to inventory which is sold out.