Does sales discount increase sales revenue?
What is usually the title of the revenue account on the income statement of a merchandising business?
a. Fees Earned
b. Gross Profit
The sales section on a multiple-step income statement includes:
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:
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?
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.
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.
Get Answers For Free
Most questions answered within 1 hours.