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ACC 100 Study Guide - Midterm Guide: Income Statement, Kijiji, Liability Insurance

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lavendermole636
12 May 2016
School
Ryerson University
Department
Accounting
Course
ACC 100
Professor
Else Grech

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Document Summary

When you"re the seller and your customer takes a discount (pays you less than the amount of the accounts receivable says they should pay you) you use a separate account called sales discounts. This account provides management with better information for decision making as they can track the amount of the discounts that they provided to their customers and compare it to the total revenue. It will help them decide, in the future, whether to increase or decrease the discounts offered to their customers. Instead of using the sales revenue account the seller uses the contra-revenue account called sales returns and allowances. You use a separate account because it provides management with better information for decision making as they know how many returns there are in comparison to the sales revenue. If the number is high management would want to investigate why there are so many returns.

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Related Questions

PLEASE ANSWER ALL OF THESE ANSWERS↓

Assignment: Accounting for Sales and Cash Receipts

Part 1

Answer the following questions:

What is a cash receipt? How do businesses record the receipt of cash?

Explain how a purchase made with a store credit card is different from a purchase made with a bank credit card.

How are a bank credit card and a bank debit card similar? How are they different?

Part 2 (6 points)

A sales slip shows that $1,500 in merchandise has been sold and the sales tax rate is 4%. Generate the cash receipt's data.

Debit (-)

Credit (+)

Debit (-)

Credit (+)

Debit (-)

Credit (+)



Part 3 (6 points)

Your accounting supervisor has instructed you to verify the accuracy of the day s bank credit card sales, and then deposit that amount into the business checking account. Summarize the 4 steps that you need to perform.

Part 4 (6 points)
Evaluate the practice of using a contra account to record sales returns and allowances.

(What is a Contra account and how does it affect the Sales Account?)

PLEASE ANSWER ALL OF THESE ANSWERS↓

Assignment: Accounting for Sales and Cash Receipts

Part 1

Answer the following questions:

What is a cash receipt? How do businesses record the receipt of cash?

Explain how a purchase made with a store credit card is different from a purchase made with a bank credit card.

How are a bank credit card and a bank debit card similar? How are they different?

Part 2 (6 points)

A sales slip shows that $1,500 in merchandise has been sold and the sales tax rate is 4%. Generate the cash receipt's data.

Debit (-)

Credit (+)

Debit (-)

Credit (+)

Debit (-)

Credit (+)


Part 3 (6 points)

Your accounting supervisor has instructed you to verify the accuracy of the day s bank credit card sales, and then deposit that amount into the business checking account. Summarize the 4 steps that you need to perform.

Part 4 (6 points)
Evaluate the practice of using a contra account to record sales returns and allowances.

(What is a Contra account and how does it affect the Sales Account?)

Should be easy, answer question and give ashort explanation

I give 1 star if you just guess


Using the following transactions, calculatethe net income.

1. Bill Co. paid $3,700 for one month rent
2. Bill Co. paid $2,900 for two weeks wages
3. Bill Co. performed $6,900 in consulting services onaccount
4. Bill Co billed a customer $3,200 for servicesperformed
5. Bill Co. received $6,900 in payment for item 3
6. Bill Co performed services and immediately collected$3,700
7. Bill Co. paid $670 for advertising in the local paper

$20,700
$13,430
$13,800
$6,530
$10,230


On August 1, Olivera Company soldmerchandise in the amount of $4,600 to Wyne, with credit terms of3/10, n/30. The cost of the items sold is $3,700. Olivera uses theperpetual inventory system. On August 4, Wyne returns some of themerchandise. The selling price of the merchandise is $460 and thecost of the merchandise returned is $370.The entry or entries thatOlivera must make on August 4 is:
Sales returns andallowances 370
Accounts receivable 370
Sales returns andallowances 460
Accounts receivable 460
Accounts receivable 460
Sales returns and allowances 460
Sales returns andallowances 460
Accounts receivable 460
Merchandise inventory 370
Cost of goods sold 370
Accounts receivable 460
Sales returns and allowances 460
Cost of goods sold 370
Merchandise inventory 370
For the year ended December 31, 2010, Mason Company has implementedan employee bonus program equal to 7% of Mason's net income, whichemployees will share equally. Mason's net income (pre-bonus) isexpected to be $2,500,000, and bonus expense is deducted incomputing net income. What is the amount that needs to be recordedfor estimated bonus liability for 2010?
$115,000
$40,000
$163,551
$48,697
$175,000

A parcel of land is offered for sale at $151,000, is assessed fortax purposes at $113,000, is recognized by its purchasers as beingworth $141,000, and is purchased for $138,000. The land should berecorded in the purchaser's books at:
$144,000.
$113,000.
$138,000.
$141,000.
$151,000.


A company had cash sales of $49,563, credit sales of $38,576, salesreturns and allowances of $7,118 and sales discounts of $4,393. Thecompany's net sales for this period equal:
$76,628
$99,650
$83,746
$81,021
$88,139

At the end of the day, the cashregister's record shows $1,300, but the count of cash in the cashregister is $1,120. The correct entry to record the cash sales forthe day is:
Cash 180
Sales 180
Cash 1,120
Sales 1,120
Cash 1,300
Sales 1,300
Cash 1,120
Cash over and short 180
Sales 1,300
Cash 1,300
Sales 1,120
Cash over and short 180
A machine originally had an estimated useful life of 7 years, butafter 2 complete years, it was decided that the original estimateof useful life should have been 9 years. At that point theremaining cost to be depreciated should be allocated over theremaining:
11 years
13 years
9 years
7 years
4 years

What would be the account balance in the revenue ledger accountafter the following transactions?

Performed services and lefta bill $5,000
Performed services andcollected immediately $3,900
Performed services andbilled customer $2,600
Performed services onaccounts $6,800
Received partial payment onaccount $1,900
$18,300 Credit
$16,400 Debit
$18,300 Debit
$20,200 Credit
$16,400 Credit


A company sells leaf blowers for $150each. Each unit has a 3 year warranty that covers replacement ofdefective parts. It is estimated that 6% of all leaf blowers soldwill be returned under the warranty at an average cost of $15 each.During October, the company sold 300,000 leaf blowers. 600 leafblowers were serviced under the warranty during October at a totalcost of $30,000. The balance in the Estimated Warranty Liabilityaccount on October 1 was $15,000. What is the company's warrantyexpense for the month of October?
$259,750.
$270,000.
$30,000.
$300,000.
$265,000.