1) Gross sales equals:
A) the total of cash sales and credit sales.
B) net income plus gross profit.
C) net sales minus sales discount.
D) sales discount less net income.
2) The normal balance of the Sales Returns and Allowances account is:
A) a debit.
B) zero.
C) a credit.
D) It does not have a normal balance.
3) Jane's Bakery sold 50 pies at $8.00 each to a charge customer, terms 2/10, n/30. Which entry is required to record this transaction?
A) Debit Accounts Receivable for $400; credit Bakery Sales for $400
B) Debit Accounts Receivable for $392; credit Bakery Sales for $392
C) Debit Cash for $392; credit Bakery Sales for $392
D) Debit Accounts Receivable for $392; debit Sales Discount for $8, and credit Bakery Sales for $400
4) Compass Outfitters sold goods for $300 to a charge customer. The customer returned for credit $120 worth of goods. Which entry is required to record the return transaction?
A) Debit Sales Returns and Allowances $120; credit Accounts Receivable for $180
B) Debit Accounts Receivable $180; credit Sales Returns and Allowances for $120
C) Debit Sales $180; credit Sales Returns and Allowances $120
D) Debit Sales Returns and Allowances for $120; credit Sales for $180
5) Accounts of a single type are kept in this ledger:
A) subsidiary ledger.
B) supplemental ledger.
C) additional ledger.
D) None of these answers are correct.